With Deals, Facebook directly challenges Groupon, LivingSocial

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As the world's most popular social network, Facebook sits in the fortunate position of counting more than five hundred million people as registered users. This week, the Palo Alto, California-based business launched a group coupon service , pitting itself against industry giants Groupon and LivingSocial. 

Facebook started offering group coupon deals to customers in five cities this week. The service will directly compete with both Groupon and LivingSocial, both dominant players in what is quickly becoming a crowded marketplace. Illustrating the quick rise the start-up companies have experienced, Amazon invested $175 million in LivingSocial in December 2010, while Groupon reportedly turned down a $6 billion takeover bid from Google .

Though Facebook faces stiff competition, it has the benefit of serving as a primary portal through which friends and family members communicate. Facebook is betting that the social interactions among users will give it a competitive edge against rivals. The deals offered on the social network will emphasize group activities; users can easily recommend coupons to friends.

Facebook director of local products Emily White told Reuters that Facebook's coupon service was carefully crafted to stand out in the marketplace. "It's not about taking someone else's business model and force-fitting it into Facebook," White said. "Ultimately we're providing what we hope is a really great user experience by looking at what people to Facebook to do, and that's interact with friends."



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This article appears in: News Headlines , Business , Technology , US Markets

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