The New Deal(s) With Facebook

What’s the Latest Development?

The  launch of Facebook’s group buying service, Deals, in direct competition with (big FB advertising spenders) Groupon and LivingSocial. To be tested first in five U.S. cities, Deals will see the first time Facebook’s payments system—Facebook Credits—is used to buy physical. not just virtual, goods. Some wonder if next FB will take on Paypal by itself offering an online payment service.

What’s the Big Idea?

Can Deals work? Business Insider says group buying services require huge sales forces and a sales-driven culture, “a far cry from the engineering-driven culture at Facebook…where they like that stuff to be done by computers as much as possible.” And the impact on the group buying market? Many say Groupon can’t get that huge because group buying has low barriers to entry but building a huge sales and service infrastructure is very hard and a significant barrier to entry. It’s like, “Anyone can start selling stuff online, but becoming Amazon is very hard.”