Facebook Deals – Groupon Killer?

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The big buzz now is that Facebook has launched Deals, a new system for finding local deals on social events that could rival others in this space like Groupon and LivingSocial.  So will it?

Deals was announced last month, so its launch has been anticipated.  What was lacking were details, which we now have.

First, the launch of Deals (happening now) is limited to only five cities: Atlanta, Austin, Dallas, San Diego, and San Francisco.  Second, the Deals are limited to social events like concerts and seminars and such.  The first means that, for now, it’s not much competition for the other two giants of social marketing.  The second means it likely will only fill part of the entire market that the other two cover.

This new setup is entirely on Facebook’s site and does not directly compete with Foursquare and Gowalla for location-based deals (though FB’s experimental Places Deals does).  This is meant for a broader audience and is generally location-based (via IP) instead of specific location based (via GPS).  Users who want to use Deals still have to opt in themselves as well.

The big change?  Deals will now allow you to make indirect purchases of the deals in question using Facebook Credits.  You know, the new currency that many say will replace the U.S. Dollar as a world exchange currency.  Or maybe not.  Regardless, the way Deals works is that Facebook Currency can be used to purchase vouchers for the deal (goods/service/ticket) which can then be exchanged for the real thing at the merchant.

The system is set to become a major player in this emerging social market, so it’s one that has to be watched.  As it is, it won’t replace Groupon or LivingSocial, but if Facebook continues to expand it, it could very well do so in the future.