Google Showing More Deal Offers Inside Search Ads

02/21/2013| 08:26pm US/Eastern

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   By John Letzing 
 

Google Inc. (>> Google Inc) has begun increasingly blending coupons and discount offers with its search advertising, the latest example of the Internet giant's tinkering with a daily deals model in competition with firms like Groupon Inc. (>> Groupon Inc)

Google, which still relies heavily on search ads as its core business, began making so-called Offer ads--featuring in-store discounts embedded in sponsored search results--available on a limited basis in 2010. Google later launched its Offers service, which featured daily deals sent via email.

The moves came as Groupon popularized the daily deals model, eventually riding it to a 2011 IPO.

Starting earlier this month Google began making an extension of its discounts and coupon service into search ads more widely available following a limited release, the company says.

The feature could "mean more eyeballs and attention for advertisers" on Google, Larry Kim, founder of digital marketing firm WordStream, wrote in a blog post.

The Google service also serves "as a great alternative to deal sites like Groupon," Mr. Kim wrote.

A Groupon spokesman declined to comment.

While Groupon's daily deals business grew quickly following the site's launch in 2008, it has since cooled. In the company's most recently-reported quarter, much of its revenue growth came thanks to its newer Goods e-commerce business.

Groupon is expected to report fourth-quarter earnings on Wednesday.

Write to John Letzing at john.letzing@dowjones.com

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