Facebook Deals Are Dead

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On the heels of Facebook proclaiming commitment to its Check-in Deals marketing feature, the social giant is killing off Deals, its Groupon competitor. Four-month-old Facebook Deals has been live in five cities but apparently never gained traction in the crowded daily deals space.

In a prepared statement emailed to ClickZ, the Palo Alto, CA-based company said it was shuttering the project in the coming weeks. "We think there is a lot of power in a social approach to driving people into local businesses," the release said. "We remain committed to building products to help local businesses connect with people, like Ads, Pages, Sponsored Stories, and Check-in Deals. We've learned a lot from our test and we’ll continue to evaluate how to best serve local businesses."

It's a good sign for daily deals leaders Groupon and LivingSocial. And Facebook's departure might be a harbinger of things to come for big-name players that recently launched daily deals initiatives, such as Google Offers, Amazon Local, and Priceline. Just this past week, consultancy Forrester Research predicted that Groupon-like daily deals will eventually die.

So, Facebook will continue competing with Foursquare by still having a dedicated feature where local merchants and retail chains can run Check-In Deals. But Facebook will no longer chase Groupon's business. The development underscores the challenges that differientiate relatively lightweight self-service geo-social marketing platforms like Foursquare from daily deals services, which require an intensive national sales force.