Google Offers launches test in Portland

The service is Google's answer to Groupon

Google Offers, Google's answer to Groupon and its entrance into the popular online coupon market, will begin a test run in Portland, Oregon, on Wednesday, the first step in an expected U.S. and global rollout.

It remains to be seen whether Google Offers will be able to find a place in a market dominated by Groupon and crowded with other competitors like LivingSocial.

There have also been questions as to whether consumers are starting to feel fatigued from so many online daily coupon offers, and whether local businesses truly get enough value from these deals brokered by Groupon and others, which charge a commission for their service.

Generally, the concept behind these services is that merchants set a specific number of coupons that must be sold in order for a deal to become available, thus ensuring a certain level of sales and participants.

In Portland, the first business to give Google Offers a try will be a coffee shop called Floyd's Coffee.

Google Offers will be tightly tied with the company's Wallet mobile payment service, which was announced last week and is being tested in New York and San Francisco.

Google reportedly tried to buy Groupon last year by offering up to US$6 billion, but the companies couldn't finalize the deal.

With Offers, Google also expects to expand and strengthen its relationships with local businesses and increase the amount of advertising dollars they spend with the company.

Still, Google clearly would have preferred to get to this market much earlier, considering the eye-popping growth that leader Groupon has experienced with this concept.

Groupon, based in Chicago, launched its service in November 2008, and currently distributes online coupons from merchants in 500 markets and 44 countries.

In January, it closed a $950 million funding round, and said at the time that it had about 50 million members and about 58,000 merchant partners.

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