Google acquires coupon provider – sets sights on social commerce

While we’re busy looking at what Google is going to do with Google + and just how much of a contender it’s going to be for Facebook and Twitter, Google have quietly been stepping up activity in other, far more lucrative areas and have shown they’re serious about getting into online commerce. Despite the social buying space going through a rather difficult patch lately, with Facebook scrapping Deals and Yelp scaling back their daily deals product, Google evidently seem to know something others don’t, as they ramp up their efforts in online commerce and social buying with 2 very different but significant moves this week.

Offers on the homepage

Google owns the single most important and lucrative page on the internet : the homepage of google.com and this week they showed that they weren’t afraid to step up and show how easily this could be monetised. For the first time ever, they displayed an ad on the homepage for people searching in New York City, that led them to an offer for the American Museum of Natural History. Thought it’s not the first time they’ve experimented with links on the homepage that take people to useful information or lead to information about Google products, this is the first time they included an ad directly from Google Offers.

In the area of social commerce, Google has the potential to seriously overhaul this completely if they decide to continue down this route and offer coupons or links from Google Offers. Though redemption figures have not yet been released from this coupon (and they likely won’t be), you don’t have to be a genius to figure out that Google monetising the most important page on the internet is a pretty big deal. This is something that they have to approach carefully of course. Google.com is a gateway to information for their users and a valuable platform for advertisers. If they introduce their own ads into the homepage infrastructure it severely interferes with both of these key audiences and the value that they gain from Google.

Acquire digital loyalty scheme Zave Networks

Google has a bit of a mixed track record when it comes to acquiring startups. Generally they spot a new area that’s taking off and after initial attempts to integrate this into the company infrastructure, there’s inevitably a startup acquisition in there to help things along. Sometimes this works well (see Youtube) and sometimes not so well (see Dodgeball). And now they’re set to continue this trend as they have recently acquired Zave Networks, which offers a digital coupon and loyalty scheme that connects people with the businesses that are relevant to them. The move was finalised on Friday afternoon and a Google spokesperson said : ““We’re thrilled to welcome the Zave Networks team to Google. They have developed an impressive platform to connect consumers with coupons, special offers and reward programs for their favorite businesses, and we look forward to their joining our Commerce team.”

While this is a significant play by Google, this is likely a talent acquisition as opposed to a platform acquisition. The Zave network might be a good product but it’s a relatively small player in the online coupon space and Google have already shown their commitment to Google Offers by injecting cash into this and, as we’ve seen, even bringing this onto the homepage of Google. So now Google needs to figure out which direction to take the social commerce platform and the Zave team look set to play a big part in this.

Up for grabs

We’ve seen recently that the idea of social commerce is still very much an open field. Firstly it looked like Groupon were going to own this, but a difficult IPO and declining traffic numbers followed, and when Facebook launched Deals it was seen as the next social commerce killer but this, clearly, has been proven otherwise. The fact is that no-one has got social commerce quite right and this largely comes down to a difficulty in knowing which platform to focus on, as mobile and NFC payments add an additional layer to be considered.

Both Facebook and Google however have a canny knack of being able to tell us what we want before we know we need it ourselves and so right now the direction of social commerce can be determined by them, as opposed to responding directly to consumer demand, which is very much what Facebook did with the launch of Deals, in an attempt to steal a march on Groupon.

And now Google has very much laid their cards on the table and have shown that – just like they did with search, email, online advertising and video ( I can’t include social networks in that list yet) – they’re serious about staking a claim in a new and lucrative market, which includes their acquisition of Motorola, as an attempt to step up to the plate when it comes to mobile commerce. Google has a serious army of tools and users at its disposal to help in their step into social commerce. The question remains however of what Facebook will do to respond to this. Just because Deals are scrapped, it doesn’t mean that they’ve scrapped social commerce altogether, only that, like Google, they want to do it bigger and better.