Yahoo! is jumping into the online deals space with a new program called Local Offers that aggregates deals from a number of companies, including Chicago-based Groupon.
The Sunnyvale, Calif.-based company said it wants to be “the largest and most comprehensive repositories of local offers on the Internet.” With the explosion of daily deal sites following Groupon’s success, a number of deal aggregator start-ups have also emerged. Yahoo! is aiming for an even broader scope by signing up companies specializing in direct mail marketing, such as Valpak.
A number of Groupon competitors are also part of Local Offers, including LivingSocial, BuyWithMe, DealOn and Tippr.
Yahoo’s Web site shows eight U.S. cities in the beta launch. Chicago is not on the list, which is concentrated in California and Michigan. Brooklyn, N.Y. is also a beta city. Yahoo said it would be making Local Offers available more widely but did not provide a timeframe.
I think what Yahoo and other daily deal aggregators don’t realize is that what they are assembling will ultimately create a customer at the deal provider’s level. The users they refer to deal supply X aren’t going to be Yahoo’s customer. The affiliate strategy takes the user off the aggregator’s site and you cannot control the transaction. Ultimately a user is only going to subscribe to so many of these daily deal sites. Once I have an account at one place with my credit card, all my vouchers etc…I’m not going to keep creating accounts everywhere. Once the user finds the suppler with the deals they like the best, they will unsubscribe to the other suppliers and aggregators since there’s already too much email anyway. If you want to be in the daily deal business, you have to own the relationship with the user, you can’t keep sending them to 10 other sites….that’s not being in the group buying business. What Yahoo is doing is essentially driving traffic to a bunch of sites thereby helping build the deal supplier sites audience without the risks of buying advertising upfront like Groupon and Living Social are. If yahoo is smart, they’ll see which site has the best platform, deal flow and system as well as which deals convert the best, then they’ll buy it and light it up with their traffic….that will most certainly cut Groupon down to size.
More and more daily deal and group-buying sites are popping up, and it’s no surprise. Consumers are jumping on the opportunities these sites offer to get huge discounts of a variety of products, and Yahoo! is going to see a lot of new business.
A great site for consumers to use to find the deals and sales in their area is http://www.dailydealpool.com, a site that will email you daily with a list of the best buys from all the sites out there.