Google Is Now Calling Local Businesses In An Effort To Compete Against Groupon

Posted Dec 24, 2010

Google Inc. (NASDAQ:GOOG) now has hundreds of employees working on a local business project that directly competes with Groupon. As you may remember, Google failed to make an acquisition deal with Groupon because of a breaking fee. The rumor is that Groupon wanted a $1 billion break-up fee from Google if the deal was blocked by the government.

Google sales representatives have been calling local businesses like spas, restaurants, and hotels to make deals. About 20% of searches done on Google is for local information. A tire replacement company in Oregon said that a Google salesman called her last month to make a $25 per month deal. Google said that they would place her business at the top of search results for “Portland tires” and it would show a 10% off coupon. The tire replacement company, Bob Brown Tire Center, would pay Google the $25 per month.

Google is selling two types of ad offerings to the four million businesses that they have connected to their Places page. The ads will show up on the Google search results and within Google Maps. The two ad offerings are known as “tags” and “boost.” Google made $24 billion in revenues last year and most of it came from AdWords.

[Wall Street Journal]