UPDATED 05:19 EST / OCTOBER 28 2011

Can Groupon Survive Google’s Deals Push?

Google has beefing up its own local deals offering just in time for Groupon’s IPO. The Mountain View Company is partnering with 14 daily deals providers and expanding aggressively into the local commerce market, all for the sake of intensifying its daily deal services in San Francisco.

Google Offers was started after a failed takeover of Groupon, which turned down the alluring $6 billion acquisition offer.  Like Groupon, Offers provides steep discounts on merchandise; everything from daily consumer needs to sports adventures.

In a blog post, Google says it’s teaming up with Dealfind, DoodleDeals, HomeRun, Juice in the City, PopSugar Shop, ReachDeals, Tippr, Kgbdeals, Gilt City, Active.com, GolfNow, Mamapedia, Zozi and Plum District to start additional offers in San Francisco and later expanding to more cities in the US in coming months.

“In order to do that, you need a lot of good deals. Even if you have one good one every day, it won’t satisfy everyone,” said Eric Rosenblum, Google’s director of product management for Google Offers.

Google is also unveiling a ‘personalization quiz’ that lets people pick and choose the kind of deals they want to see.  The quiz will ask consumers about the deals they are looking for, spanning the office, home and hang out locations.  The information will then be used to deliver multiple offers according to their interests, delivered as a collection in a single e-mail.

“During this quiz, we’ll ask you for information about the types of deals you like, as well as where you live, work and hang out,” product manager Nitin Mangtani said in the blog post.

“If you’re not the outdoorsy type and you don’t love spa treatments, then we won’t send you deals for zipline adventures or hot stone massages. People do feel overwhelmed by information. They want to have the best deals for them and most relevant deals for them – it’s very user-centric,” Google says.

Google’s Growth Plan to Take on Groupon

It was only last year Groupon turned down Google’s offer, deciding to go it alone and raise capital through its now delayed IPO. Today, Groupon ongoing initial public offering (IPO) valuation is about $11 billion. Groupon is also focusing on new services, like Groupon Reserve, to provide high end deals from high-end merchants.  The move is part of Groupon’s strategy to lure investors for the IPO offering and to let the market know they’re still capable of growing, and eventually turning a profit.

On the other hand, Google has spent more than $500 million for as many as 54 acquisitions this year, and major part of the chunk has gone to daily deal services. Google spent $151 million to buy restaurant-reviews firm Zagat Survey last month alone.  It has also spent another $114 million to acquire the Germany-based Daily Deals GmbH in September.  Google sees acquisitions as an important element for its overall corporate strategy to take on the daily deals sector, eventually incorporating it deep into its network across search services, Maps and other mobile-web Apps.


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