Facebook news feeds will appear slightly different for many users, as the social networking site announces Deals in several cities. Those who subscribe to this new feature will receive announcements of current and ongoing deals either within their news feeds or by e-mail. As Deals becomes more prevalent within Facebook, other group-buying services such as Groupon and LivingSocial could see some serious competition.
Facebook has some edge over the competition, not only with its 500 million active users and counting, but with its ability to manipulate the news feed to feature Deals to subscribers.
Subscribers will be offered several types of deals: individual deals for a discount, or reward; friend deals where friends claim an offer together; loyalty deals for being a frequent visitor to a place; and charity deals where businesses pledge to donate to a cause when users check in. Additionally, users will not be required to share their location to receive these offers.
Users will now be able to share their purchases with friends, as Facebook increases the news feed visibility – making Deals or user purchases appear more frequently. As more subscribers begin to act on current offers and share their new Deals, it is expected that these stories will see high levels of engagement, taking away focus on other third-party services or competition.
Facebook is currently offering this to participating businesses free of charge. However, this may not last very long as they could require the 30 percent fee they request from application developers, match the 50 percent fee Groupon tacks on, or decide on an entirely new rate. Whichever fee they choose, it will mark the first time the news feed will be directly monetized.
One of the most attractive features of the news feed is the ability to offer users information they want to receive, not necessarily how they can spend their money. Initially, some users may dislike Facebook Deals appearing in the news feed, but it also provides the social networking site the opportunity to further develop these Deals to be based on user interests or previous purchases.
Until Facebook Deals expands throughout more cities and businesses, we can only assume what kind of user response it will receive. What this does guarantee is new competition in the group-buying space, and a lot more pressure on location-based services like Groupon and LivingSocial.