Google has made some major changes to its daily deals business. According to Reuters reports, Google Offers will now distribute daily deals from at least 15 other daily deal sites, including Gilt City, kgbdeals, TIPPR, Plum District and Juice in the City.
Google will continue offering its own daily deals, but with these new changes, it would be able to offer a lot more deals, without expanding its sales force. The revenue generated through the deals will be shared by Google and the other deals sites it has teamed up with.
Google Offers subscribers in the San Francisco Bay Area will receive the new deals first, but Google plans to launch the new deals in several other cities in coming months.
Last year, Google tried to buy daily deals giant Groupon for about $6 billion, but was unsuccessful in its plans.
“Building out a local sales force is not really part of Google’s core competencies and given how slowly they had been increasing the number of active deals and cities it would have taken them a very long time to get to a scale anywhere near Groupon’s,” said David Sinsky of Yipit, that aggregates daily deals and analyzes data on the industry.
“Google wants to gain scale so that it can compete with Groupon and LivingSocial to have a large enough quantity of deals to be able to intelligently target their subscribers with specific deals. If Google gets a large enough inventory of deals it will be able to distribute them to a lot of users quickly,” Sinsky added.
In a move to strengthen Google Offers, the search engine giant acquired German Groupon clone DailyDeal for $200 million last month. Google also purchased Dealmap, a company that aggregates a bunch of daily deals sites on a map; and New-York based restaurant guide Zagat, to offer valuable deals related to restaurants, hotels and nightclubs to the customers. According to the Wall Street Journal, Google spent over $1.4 billion totally on acquisitions this year.