Regardless of its dysfunctional IPO, Groupon still is the dominant leader in the daily-deals business. The fact is the small-business segment is a huge opportunity.
Many companies are trying to get a piece of the action, such as Google (NASDAQ:GOOG), Intuit (NASDAQ:INTU) and Microsoft (NASDAQ:MSFT). But it can be tough to get traction.
This certainly has been the case with Facebook. Even with its massive user base, the company’s small-business strategy has been lackluster. Keep in mind that — after several months — it suddenly nixed its daily-deals business.
Now it looks like just a temporary setback. Facebook’s next idea to gain momentum? Offering up to $10 million in free advertising credits to small businesses.
OK, on its face, this might not sound like much. After all, Facebook is generating billions of dollars in revenues. Yet the company’s program is more than just a digital giveaway. For example, Facebook is partnering with the U.S. Chamber of Commerce and the National Federation of Independent Business to provide education and support on how to put together effective social advertising campaigns. Facebook even will conduct town hall meetings across the nation (not virtual events).
It’s a smart idea. For many small businesses, the biggest challenge is getting new customers. So by learning new advertising techniques, this should be a big help.
What’s more, it should be much better than Groupon’s approach, which often is expensive and mostly results in one-time surges in sales. Can you really run a business this way? But with Facebook advertising, a small-business owner can find ways to get a steady stream of customers — with a fairly low spending threshold.
Of course, the same can be said of Google, which operates the highly successful AdWords business. And now with its new G+ service, it already is focusing on getting a bigger share of the small-business market. In other words, it is yet another battleground for Google and Facebook, with Groupon trailing away.
Tom Taulli is the author of “All About Short Selling” and “All About Commodities.” You can also find him at Twitter account @ttaulli. He does not own a position in any of the stocks named here.
