Tech Report: Amazon, Google Challenge Groupon

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A deal offered on the Groupon website (Groupon.com)

A deal offered on the Groupon website (Groupon.com)

LarryMagid01-228 Larry Magid
Larry Magid is a technology journalist and an Internet safe...
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(KCBS) – The daily deal marketplace continues to heat up as just this past week, Google and Amazon have moved into the business, which was started by Groupon.

On Monday, Google announced it had purchased Dealmap. And last week, Amazon.com, in partnership with LivingSocial, launched daily deals in Chicago, the home of Groupon.

KCBS Technology Analyst Larry Magid:

KCBS Technology Analyst Larry Magid said the market seems to be saturating rather quickly.

“I don’t see a lot of difference between these two and Groupon,” he said. “It’s the same concept, where you get a special offer from a merchant in your community.”

Magid said that while the deals are usually a bargain for consumers, the question is what is in it for the merchants offering the deals.

“Are they going to make better offers for merchants so that’s it’s profitable and it helps build their business? Because Groupon has been criticized for actually costing the merchants too much,” Magid said.

He said it is especially hard for merchants to build their business because of a lack of repeat customers.

Magid said the field will get even more crowded as local media companies are jumping in as well.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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