Google is a Threat to Everyone in Daily Deals

Whether you hate or love Google, you still probably use one of their products on a daily basis. If it is Google search, Gmail, YouTube, whatever it is, they have a large user base.

Google launched Google Offers last week. This is going to mess up everyones business in the deals space. Why? I’ll tell you why.

1. Google has an endless barrel of cash. They can put billions into this project, and not feel it.

2. Google owns Adwords. Take a minute and search for daily deals, daily coupons, or any other query in Google. See some ads? Yeah. Google can just use their endless pit of money to fund Adwords campaigns to convert people to subscribers for Google Offers. If you go across the web, you will see a lot of ads from the other big two in the daily deals space.

3. Google can just link Google offers from Google.com. Remember when they launched the Nexus One? They put up a link under the search box, and people bought the phones. It really is that easy for Google.

4. Feature YouTube videos of people’s experiences as consumers using deals at restaurants or anything else for that matter. I mean really feature ‘em. Take a camera crew and make videos of people skydiving or whatever. I feel a lot of people (outside the tech space) don’t “get” the concept of daily deals. Google can bring in YouTube into this and just put videos of people enjoying their Google Offers experiences on the YouTube homepage, and people will view that and be inclined to subscribe and/or purchase from Google Offers. That 1 big ad on YouTube costs advertisers something like $500k a day (give or take a few), so Google can obviously afford it. This would be the best filter to set Google Offers apart from anything else available. People are more inclined to convert (buy/subscribe) with their eye’s, not ads (marketing the service). Showing “Google Offers is awesome” to future customers is way better than just saying it “it’s better.”

5. Hire a brilliant team. With money comes power. With power comes talent. And Peter Parker didn’t say that. When you have talented people running things, prosperity comes about. Everything from the sales people to management, Google HAS to have the best of. This will be a major factor in the success. They will also have to deliver the BEST of the BEST deals available.

6. Google can also afford to “offer” the best of the best deals by cozying up to merchants. Since Google has the funds, they can afford not to make money for a long time. Remember when they bought YouTube and they kept spending endless amounts of cash on running it and never turned a profit? This enables them to give merchants 100% revenue proceeds from the deals that are run through Google offers. So mix in a whole lot of subscribers, add 100% revenue proceeds to merchants, and then add in Google’s team to that, WHY would a merchant go with anyone else? In fact, I’d go further:

To be really specific, if I ran Google Offers, to kickstart the product I would do something like: put in $2 billion into marketing the service (online and in the real world, tv, etc.), and put another $4 billion into getting the best deals the world has ever seen. In fact, I would pay elite merchants 100% of the difference between the deal and the retail cost of the deal, to feature them, so that would be like telling a merchant: “we’ll give you free leads, and it literally won’t cost you a penny.” 

Essentially if I ran Google Offers, I’d rank merchants by three types. Regular, Elite, and Really Elite.

Regular merchants would get 100% of the net deal value. If it was a 50% off deal for $50 in value, being sold for $25, the merchant would get $25 and Google would take no cut.

Elite merchants would get $50 from Google Offers for each sold. So Google loses (or pays) $25 per sold. This type of deal would come around every so often.

And the Really Elite (something like a restaurant Gordon Ramsay owns, or a Trump hotel), would get $X on top of $50. So it’s an incentive to run a deal for these merchants. This wouldn’t come around too often, but when they do- people would make sure they are on top of the service daily to get them before they are sold out. In a way it encourages users to always check that Google Offers email, so they know they aren’t missing out, ever.

P.S. - Google: don’t mess this up.