People who use Places, Facebook’s location feature, will see a yellow icon indicating that a redeemable deal or coupon is available nearby. They can then use the application to “check in” at the store or restaurant and show their phone’s screen to an employee to claim their deal.
“We’re enabling merchants to push deals out to their existing customers and hopefully attract new customers,” said Tim Kendall, director of monetization at Facebook, during a press event at the company’s headquarters in Palo Alto, Calif.
Mr. Kendall said Facebook would not charge businesses directly to list coupons and special deals through the mobile application. Instead, businesses can purchase advertising to publicize their offerings on Facebook, he said.
One of Facebook’s first partnerships involving the new Deals feature is with the Gap. The company outlined a campaign offering a free pair of jeans to the first 10,000 users who check into their local Gap store using Facebook’s mobile application.
Facebook also plans to work with nearly two dozen major chains like H&M, 24-Hour Fitness and McDonalds for special offers. But eventually all merchants and small businesses with a Facebook Places page will be able to offer deals.
“It starts to solve an age-old problem that local businesses have always had,” said Emily White, director of local at Facebook. “They’ve been told they need to be online. But it hasn’t always been clear what the benefit is. That’s what this deals platform allows. It’s turning those fans, those visitors, those eyeballs into real dollars, real people and real business.”
Local retailers will be able to offer several different kinds of deals, including one-time offers and loyalty rewards, as well as “friend deals,” for those who check in and “tag” multiple friends. Mark Zuckerberg, the founder and chief executive of Facebook, said it would be difficult to defraud the system because people will be required to be present at a store in order to redeem the coupon.
To start, the new feature is available only through the Facebook iPhone application. Android users can find local deals through a dedicated mobile Web site.
Facebook’s deals program borrows heavily from location-based social networks like Foursquare, Loopt and Gowalla, which have long been experimenting with similar ways to offer rewards and deals on cellphones.
Facebook’s large user base, which exceeds half a billion people, gives the company a clear advantage over smaller competitors that have only just begun to gain traction, said Ray Valdes, an analyst at Gartner.
“Facebook is now the largest photo-sharing site on the Web and the largest invite service on the Web,” he said. “Getting into the local deals business might have the same effect. Competitors will have to maneuver in order to not be at a disadvantage and get squashed.”
Facebook’s announcement also places the company more squarely in Google’s line of sight, as both companies battle to be the primary hub for both businesses and consumers on the Web. In recent months, Google has taken steps to bring more small businesses online and help users find those businesses more easily.
Analysts say the two companies are competing to tap the market for mobile advertising and search, which is still in its infancy. For retailers, the Facebook feature offers the chance to establish online connections with real-world customers and learn more about them.
Another advantage Facebook has over Google is a way to exploit the social connections of its users. As they cash in on deals, alerts are published to their Facebook news feeds, alerting people in their network to the offer and broadening the number of people who know about it.
“Each of these announcements may seem like a small thing, but it adds to the centrifugal force that Facebook has in the evolving modern Web,” said Mr. Valdes.
Mr. Zuckerberg said the announcement aligned with Facebook’s larger goal of building a social Web that, increasingly, is also mobile.
To illustrate the point, he said 200 million people were now using Facebook through its mobile application, a threefold increase since last year.
“Think about Android and iPhone,” Mr. Zuckerberg said. “This is a much bigger footprint than that. The only bigger platform is the mobile Web itself.”
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Best Buy has officially launched part of their 2010 Cyber Monday deals a day early today and is promoting free shipping as well. The rest of the deals will be released tomorrow on the actual Cyber Monday day of the week. 