On the heels of the Google Deals announcement just a few days ago, Facebook is introducing its very own version of Deals yesterday. Groupon and LivingSocial have had hockey stick growth and valuations taking off like never seen before but many have speculated their valuations have been overblown - I think we will see values dropping in the short term to more realistic and level-headed ranges. After all, the only barrier to entry is establishing a sales force that can market and sell to businesses willing try something new in their marketing budget.
Google and Facebook are much stronger competitors because they can unite deals with other initiatives and offerings in Google's case or their huge user bases in Facebook's. Facebook deals has already been available in Europe for three months and has seen traction from mobile phone operators to automobile companies.
Of course, the really interesting part of this up-for-grabs market is that the biggest potential competitor has yet to enter: Amazon. The world's largest retailer has already shown signs of interest and even put a heavy initial investment in LivingSocial.... what happens if Amazon decides to join the party?"
Offering deals to consumers has opened up a lot of wallets that were previously budgeting their spending and now the marketplace is about to double. People just can't resist a good deal!