The idea behind Google Offers is that a small business offers a deal to customers, assuming that a certain number of people buy in. Google Offers markets these deals to online customers via a daily email or other advertising avenues. Customers buy in, and once a certain number of purchases are made, the deal is completed.
Google Offers delivers the goods and the profits, holding on to a certain amount of the revenue to ensure refunds are not requested and can be paid for. Once sixty days has elapsed, all parties get their money and the deal is complete.
The end result is the customer is happy with a great bargain, the business is happy with increased revenue and customer traffic, and Google is happy with more money in the coffer. It is not hard to understand why Google would be interested in such an idea. Their infrastructure is perfectly set up for such a business idea.
Google Offers will reportedly be powered by Google Checkout, and will also be tied in with all the various social bookmarking and Google options.
Far From Novel
The idea is far from novel.
Groupon has been doing it and doing it well and so have others, like LivingSocial. Google actually attempted to buy Groupon out a few months ago, but their six billion dollar offer was not enough and Google now is in the test market for their very own version.
So what does this mean for Groupon? Groupon is going to struggle in the wake of this new offering from Google. Because of Google's reach and power, it is hard to understand how Groupon could possibly escape from this news unscathed. Still, Groupon is no small fish themselves, at least in this world of business. They are also in competition with LivingSocial and others that offer this area of e-commerce.
While this is in the testing phase only, Google Offers almost could dominate the market on this if they do it right.
A superior reach and advertising avenues could make them dominant in many ways. Also, they would have a much easier time getting participants in the business community due to brand recognition and trust. That remains to be seen.