Facebook goes after Groupon with new pay-for-offers scheme
Facebook (FB) knows it can’t keep growing without generating new revenue streams, and Reuters reports that the social networking giant may have found some potentially significant ones if it can get businesses to pay for its Offers service. Facebook Offers, which launched earlier this year, has so far been a free service that lets businesses send out special deals and coupons to their followers on Facebook. But Reuters says that within the next month Facebook “will require merchants to pay at least $5 on related ads to promote each Facebook Offer to a targeted audience of fans and friends of fans.”
Facebook will also open up its Offers to online-only businesses, meaning that companies will no longer need to have a physical location to participate in the service. Reuters says that Facebook decided to start charging for Offers due to pressure from investors who have been unhappy so far with the company’s declining stock price.
“We think this aligns incentives nicely,” Gokul Rajaram, Facebook’s advertising director of product management, told Reuters. ”The requirement to pay for related ads will focus merchants on who and where they want the offer to reach.”
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