Facebook Deals versus Google Offers

Jason: Hey, it’s Jason Hennessey and Chris Watson, and we’re from Everspark Interactive. Welcome to our video blog.

Chris: Right.

Jason: So today we’re gonna be talking about something that has just come up in recent media. As most of you know, Groupon, about – I wanna say six months ago, maybe – they declined an offer of six –

Chris: Billion dollars.

Jason: Billion, with a ‘B.’

Chris: Yep, I don’t think it was six months ago. I think it was maybe –

Jason: Maybe a little longer, or –?

Chris: Three – three months ago. Sooner.

Jason: Sooner? Okay. So they declined a $6 billion deal. And I guess they were hoping for 600 billion. I’m not sure.

Chris: I think there’s a lot more to it. I, I think that they – Willstat offer may have been made. I don’t know if it would’ve ever gotten through. So I think it was probably more about an evaluation of a company.

Jason: Sure.

Chris: That’s one theory – but anyway, it was a lot of money, and it, uh – it made a, a, a lot of news.

Jason: Or –

[Crosstalk]

Jason: – Because a lot of people, they’ll think about this too. They’ll – like, whenever you actually put an offer on the table like that – Google wants to see financials, and they wanna see a lot of the detail. So it could’ve been a ‘play’ where Google was just looking to gather that information. And the deal – like you said – doesn’t actually go through –

Chris: Mm-hmm.

Jason: – yet. Now they have all the ‘ammunition’ to compete –

Chris: Yeah.

Jason: – which they’re doing net –

[Crosstalk]

Chris: – isn’t it interesting that now they’re coming up with Google Offers.

Jason: So maybe the deal was never gonna go through, like you said. I never thought of that.

Chris: Yeah.

Jason: Conspiracy theories, huh?

Chris: Stick with me.

[Chuckling]

Jason: So um, and as you know now, Google does have their own discount platform, and it’s called Google Offers. And they’re gonna be experimenting in five markets. I think its Atlanta, Austin, Dallas, San Diego, and San Francisco.

Chris: Mm-hmm.

Jason: So they’re gonna be experimenting with that. No, I take that back. That’s to Facebook.

[Crosstalk]

Chris: – Face – Facebook, yeah.

[Crosstalk]

Jason: That’s to Facebook –

[Crosstalk]

Chris: – in all the cities.

Jason: Google Offers is just in Portland.

Chris: Right, right.

Jason: In just Portland.

Chris: Right.

Jason: So what are your thoughts on this?

Chris: Well, one of the reasons we’re making this video, is, is that yesterday, um, our – our phones ‘blew up.’ And uh, we got lots and lots of calls about fr- from media, all around America, asking our opinion about this particular [inaudible] Jason. So today we woke up, and Jason’s quoted in, in the San Francisco Chronicles –

[Crosstalk]

Jason: San Jose –

[Crosstalk]

Chris: – Times, and –

Jason: Yeah.

Chris: – LA Times did piece –

[Crosstalk]

Jason: LA Times, yeah, mm-hmm.

Chris: And I just made this very quick comment to Jason, and uh, and he’s challenging me on it. So we thought we – we’d have a live debate a- about this topic.

[Chuckling]

Chris: There’s a good chance I’m going to lose, uh –

[Giggling]

Chris: – because he stu- he studied. And he’s also probably right.

[Chuckling]

Chris: So I’m gonna go – I’m gonna ahead and take a shot at it. Jason came in, I said, “You see all, all the press?” He’s like, “Yeah, it’s great. It’s great.” And I – and I – and I quickly said to him, “I actually think Google’s gonna, gonna win this one over Facebook. And Jason said, “I completely disagree.”

Jason: Right away.

Chris: I go, “Hold on a second. You haven’t even heard my argument.” And he said, “Let’s get this on camera.” So we’re here to argue about it.

[Laughing]

Chris: So here we go. Um, the – my – my very quick comment, uh, to that is just that I, I think this game, uh, of, of, of coupons is a little bit different. There’s a nuance there that I don’t think people are, are particularly looking at. And I think that nuance has to do with, with, with “going with the river,” right. I think that Google has done what it’s done all the way long be- because they’ve understood that their whole business is about “rolling with the river.” [Continual sniffing in background] They’re not trying to force anything on anybody. They’re meeting people when they’re searching.

Jason: Sure.

Chris: And I think the point you made in, in the interview, I, I think it was the San Francisco Chronicle –

Jason: Chronicle?

Chris: – um, about that fact that um, “no emails were being sent,” was really a, a great point.

Jason: Right.

Chris: Because all the other groups out there were sending emails to everyone. They had these huge lists. They had millions and millions of people on their list, but they’re still having to force that step of clicking on an email. That’s a great point.

Jason: Let – let me expa –

Chris: Yeah, yeah.

Jason: – Let me explain that a little bit because they might not be reading that article. So what I said was, “I don’t know how a company like Groupon could compete, when it requires two steps.” Meaning, one you have to ‘opt in’ to the, to the Groupon list. And then two, you have to check your email every morning to see what kind of deal there is.

Chris: Sure.

Jason: And Groupon doesn’t have all this information about you that Facebook and Google has. Therefore, it’s – it’s a lengthy process that requires work on your part. And – and that’s the reason why, kind of, I said that, so.

Chris: Right, right, right.

Male Speaker 1: Mm-hmm.

Chris: So my – my prediction is, is that this is gonna take a turn, whereby, Google is going to do what it does best, and that is ‘search,’ okay. And Google’s going to allow people to, simply, “go with the river.” I don’t have anything much more profound than that other than to suggest that I think people immediately gravitate towards Facebook because the, the manner in which they can collect data on people. So they have profile stuff, and they can send offers. And that’s – that’s hugely powerful. So maybe the prediction I’m making is, is probably idiotic, but I wouldn’t underestimate Google’s ability when it comes to purely – when it comes to ‘search.’

Jason: Sure.

Chris: And I don’t think you’re doing that. But I – but I do think that they’ve got a much greater ‘shot’ at go- “going with the river,” in terms of if you – if, if, if you’re showing up on searches – and like they did this year, right, they changed places around.

Jason: Mm-hmm.

Chris: They made that more prominent. If they want to they can make anything more prominent that they want, right? And, and, and to date, Facebook isn’t in the search business, right? It’s being used in search, when people are inside the community, but for generic search, it’s not there. So I think to – to make a, a – if we’re gonna say who’s gonna win the race, I think ultimately – maybe in a year’s time – the winner – the No. 1 – pr- probably could be Facebook or would be Facebook. But I think in the short-term, I think – I think Google is gonna have a great ‘run’ at it. And I wouldn’t be surprised if they pulled out some things that we’re not, not expecting of them right now.

Jason: So one thing, I, I agree with you.

[Crosstalk]

Jason: [Chuckles] I think the ultimate winner is going to be the consumer.

Chris: True, true.

Jason: Right? Because now you have so many, so many different platforms to, to go to, to look for discounts on vacations, on dinners with the family –

Chris: Yeah.

Jason: And one of the good things about this is it’s gonna allow – it’s gonna – it’s gonna force business to have to go online now –

Chris: Yes.

Jason: – and start to market their business online.

Chris: Yeah.

Jason: – which is great for our business.

Chris: Sure.

Jason: Because now, eh, you’ve got a traditional “Mom and Pop business.” This is – this is kinda how I see it. I think realistically, Google is gonna take this, right? And they’re gonna have – they’re gonna, uh – they’re gonna include this within their, their Places, right? And, and within the Places, when you set it up, it’s gonna ask you what kinda coupons do you wanna do this week?

Chris: Exactly right, yep.

Jason: And then when you go to Google, and you start to do a search for pizza, one is gonna be very geo-targeted, and it’s gonna display pizzeria’s that are within a five-mile radius of your home.

Chris: Yes.

Jason: But now the pizzeria’s that are participating with these discounts are gonna start to appear higher –

Chris: Yes, right.

Jason: – because now it incentivizes Google to make money off of these discounts.

Chris: Exactly right. And if, if, if – if Google is true to its mandate, which is about user experience –

Jason: Mm-hmm.

Chris: – making a better experience for the user, it stands to reason that they’re going to add something to their algorithm that says if it’s been a successful campaign, successful coupon. There – that’s actually gonna be part of how you rank high on Places.

Jason: Sure. I, I think that’s gonna be a part of the algorithm.

[Crosstalk]

Chris: Right.

Jason: So now if you have a local pizza shop, and you’re not actively engaged in this – in this kind of world, well, it’s gonna be – it’s gonna be the norm now –

Chris: Yep.

Jason: – where I’m not gonna order a pizza unless I use a discount code, right?

Chris: Yeah.

Jason: And I’m gonna participate in one of these Groupon-like deals.

Chris: Yeah, yeah.

Jason: I wanna save that $5.00 on the two ‘pies’ that I’m gonna order. And –

Chris: What do – what do you – and I’m gonna go off topic a little bit here – but – but um, what do you think it’s gonna do to Bing. Because seems – Bing – Bing was trying to make its name for being able to price comparison searches –

Jason: Mm-hmm.

Chris: – which is really quite smart. And if you – and be – I know most people are – are – tend to use Google, but when you do go to into Bing, I mean, it’s, it’s actually – it is a, a great engine. I’m just interested in what you think that’s gonna – like it – I think it’s gonna undercut it dramatically. I think – I think Bing is on – is in for the fight of their lives –

Jason: Sure.

Chris: – with this one.

Jason: Sure, uh, realistically, I think Bing is still in a Beta, um, with everything. I mean, they’ve really just basically “erased the whiteboard,” and they’re just starting over, right? And they’re – they have to compete. They’re gonna have to come out with a discount code. And I wouldn’t be surprised if Twitter didn’t roll out some kind of a discount program here.

Chris: Yeah, [inaudible].

Jason: Um, so realistically, I think those ‘cards’ are yet to be, um, revealed.

Chris: Mm-hmm.

Jason: But um, but uh, we shall see.

Chris: Yeah, and you know I think the other point that – that – that is worth making, is, is – is that you know, everyone’s gonna c- get caught up in the hype of, of all this, but the fact is, is that the Groupon model, or the discount coupon model, is only appropriate for certain types of business, right.

Jason: Mm-hmm.

Chris: It’s – it’s a – it tends to – it’s a “retail play.” And I’m, I’m gonna be interested to see the effect that this type of thing has on professional services, right?

Jason: Sure.

Chris: On, on ‘B’ to ‘C,’ or ‘B’ to ‘B.’

Jason: And – and legal services, or, or –

[Crosstalk]

Chris: Yeah, yeah.

[Crosstalk]

Chris: I can’t imagine a law firm saying, you know –

Jason: [Chuckles] “$50.00 coupon on your divorce.”

Chris: Yeah. But I think it’s gonna add a dimension t- to, to how, uh, potentially, h- how, uh, lawyers and professional services do market themselves on Google. And I think it’s gonna pose a question. I don’t think that question’s gonna be answered in the short-term, but I think it’s going to start to go down a path of, of, uh, o- o- of reframing the discussion.

Jason: Mm-hmm.

Chris: [Inaudible] how it “pans out.”

Jason: So for me, Google is a strong secor- second. And I think I quoted that in the, um, San Jose Mercury – Mercury, and the reason why I say that where you’ve got ‘Facebooking,’ an- an- and uh, Google competing, is because Google requires that additional step. So you’ve got Groupon, which is a st- three step process: Opt-in, right, check your email, and hope that that – that the u- offer is relevant to what you’re interested in

Chris: Sure, sure.

Jason: Right? The second thing is Google is more of a two-step process. You’ve got to go to Google, you got to do a specific search, and then you have to look at the offers. Whereas Facebook, they know what movies I like, they know where – the – my favorite restaurants, right?

[Crosstalk]

Jason: And they – I can just be typing online, and all a sudden – u- an offer appears, they know that my favorite food i- is Italian, and they know that I maybe, possibly had a review on this particular restaurant.

Therefore, here’s my $25.00-off coupon to this restaurant, and they’re gonna sp-, like, specifically place that ad there at, at 4:00 when I’m thinking about where I’m gonna be eating for dinner, right? So it brings everything to the forefront, where you don’t have to do any searches, it’s just – it’s just the magic of, of, uh, of – especially when you’ve got 600 million users too – the magic of just bring, uh, advertising to your peripheral vision.

Chris: Jason, I wish you weren’t so ignorant.

Jason: [Laughs]

Chris: The fact of the matter is –

[Crosstalk, laughing]

Chris: – It’s a great point. It’s a great point. Yeah, and it’s hard to contest that. You – you’re absolutely right. But I would suggest that – that – that it’s all about a metric of wh- what is called, ‘success,’ right?

Jason: Mm-hmm.

Chris: So I mean, I could wager with you right now a hundred bucks said – to the winner and what – what – what – you know, what – w-

[Crosstalk]

Jason: That’s a –

[Crosstalk]

Chris: – but, but, but – but what does – what does it mean? Is it – is it in six months, is it in a year? What –

Jason: That’s true.

Chris: – What’s the metric? What are we looking at?

Jason: Sure, mm-hmm.

Chris: I would suggest that there’s a metric there that people aren’t looking at, and that metric is Google Places, right?

Jason: True.

Chris: How many Google Places – Places are out there right now? And I actually know the number, but it’s growing everyday bigger and bigger.

Jason: If you have a business, you better get a Places account.

Chris: Right, right.

Jason: And if you don’t know how to do it, give us a call –

[Crosstalk]

Jason: – And we’ll be happy to help you.

Chris: There’s a way to get, not just a Places account, but how to get it ranked –

Jason: That’s right.

[Crosstalk]

Chris: – spot. So [inaudible] do that.

Jason: Mm-hmm.

Chris: And I – and I think it’s – it’s a very subtle th- thing out there that people aren’t really thinking about in the context of coupons. And you hit on it before, there’s gonna be a, a process where – we – at least we predict – it’s gonna be within the Places area. But it’s, it’s, it’s how they want – h- how, uh, prominent they want to display that. Facebook, on one hand, has got the upper hand in terms of, of data on people, but I think that – that Google having the upper hand on search is gonna serve extremely well in this ‘play,’ an- and I –

Jason: It’s targeted.

[Crosstalk]

Chris: When you put – y- you’re looking for something specifically –

[Crosstalk]

Jason: Chinese food and Tequila Georgia.

Chris: Right.

Jason: Right? There you go.

Chris: Right, right, right, right.

Jason: Yep.

Chris: And that’s a – you know, i- it’s – it – there’s – it – there – th- good chance you’re right. But I’m gonna go ahead and say Google’s gonna win the race. We’re yet to determine what the variable is –

Jason: [Laughs]

Chris: – but we’ll – we’ll get to that. We’ll do another video [inaudible] –

Jason: There you go. Thank you very much. Again, form Everspark Interactive, I’m Jason Hennessey.

Chris: I’m Chris Watson.

Jason: Have a good day.