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The world seems to be in need for more group buying sites. Hunger and drive for such sites does not seem to be diminishing. Google has decided that it wants a bigger share of the pie.

Over the past year, Google has been focusing a lot on the intersections between location and commerce. Late in 2010, the company toyed around with the Yelp-like Hotpot. Around the same time, it also reportedly made a pass at Groupon in the form of a $5.3 billion acquisition offer.

Then, in January 2011, we got a peak at Google Offers, the company’s Groupon competitor. One month later, Google (finally) added checkin capabilities to Latitude on  Google Maps 5.1 for Androids, its feature for sharing location with friends.  While in the past users where able to share their location, it wasn’t based on a specific physical location, like a restaurant or bar, but just longitude and latitude coordinates — a dot on a map. Now, you can actually check into a place, which adds context, like a caption to a photo.

Checkin deals from merchants doesn’t seem to be far behind.

New acquisition

Google announced on Monday that it has acquired Dealmap, a new startup that will fuel the search engine’s efforts to mimic Groupon. The California based startup aggregates daily deals from hundreds of sources, and its various services are now used by over 2 million people, according to the company.

The Dealmap makes 400,000 plus local and daily deals available daily and has over 50 commercial distribution partners, including Microsoft Corp. (MSFT), CityGrid, Local.com, MerchantCircle, MyPoints, Savings.com, SuperMedia, and T-Mobile. The company makes $10 million in savings available every day.

Why Google?

Dealmap has been approached by many other potential buyers, but it agreed only to Google. The company said in a blog post that it chose to be acquired by Google because they share a desire to help save people money and that the search giant is equipped to help accelerate The Dealmap’s growth.

The blog post read as:

“we believe Google provides the ideal platform to help us accelerate our growth and fulfill our mission. We’re passionate about helping people save money while having great local experinces, and in Google we’ve found the perfect partner that shares this passion, as well as out vision and strategy. We believe that joining Google will help us innovate in new and unexplored areas of commerce.”

Well the large cash reserve sure would be put to good use!

For now, it looks like the company will continue to aggregate deals for its partners and provide its core services to users. But we’ll have to find out the long-term plans when the integration work is completed.

 Why Dealmap?

Google started testing Google Offers in June in Portland, Oregon. Its answer to Groupon now covers several U.S. cities including Portland, San Francisco, and New York. It plans to extend the service in Austin, Boston, Denver, Seattle and Washington D.C.

There are other small local group buying companies, out of all this Google selected Dealmap. This makes us wonder about the thinking behind the acquisition.

Edge

At this point in the game, the object isn’t to beat daily deal players like Groupon and LivingSocial per se; it’s to become the simplest one-stop-shop for deal-seekers, then to integrate Google’s own revenue-generating offers (and advertising) with the deals from more established players. And the Dealmap is a perfect, consumer-friendly way to do that.

The Dealmap allows users to see local deals from more than 150 sources on a map. The Menlo Park, Calif.-based company has attracted more than two million users and generated more than 85 million monthly visitors for its partners. The Dealmap has distribution agreements with more than 50 partners including Microsoft , CityGrid, Local.com, MerchantCircle, MyPoints, Savings.com, SuperMedia, and T-Mobile.

Growth

Within a short time Deal Map has gained lots of traction, it has been selected as one of the top apps by Wall Street Journalm PCMag, Gizmodo and Life Hacker.

“We are impressed with what The Dealmap team has accomplished and excited to welcome them to Google,” Google said. Terms of the deal were not disclosed.

Dealmap brings together deals, discounts, and coupons from a variety of sources and plots them on a map of the U.S. Besides offering this information through its website and e-mail, Dealmap offers apps for Android phones, and Apple’s iPhone and iPad. It claims over 2 million users.

“We are impressed with what The Dealmap team has accomplished and excited to welcome them to Google,” Google said in an e-mailed statement. “We’ve been thrilled with the early success of our commerce offerings, and we think they can help us build even better products and services for consumers and merchants,” it added.

Search

Indeed, collecting and searching information is at the heart of what Google does well. The Dealmap succeeded not only as an aggregator, but also a provider of data. Its API had 11 million queries per day back in February.

The Dealmap’s product itself will remain unchanged “for the time being,” according to its own announcement. That includes the API, something we see discontinued after some acquisitions, such as when Facebook killed the NextStop API.

Keep them at bay

It was rumored that Microsoft would buy Dealmap, after partnering with it for Bing Deals. Being such a lucrative segment, every tech company is looking to put its foot inside the door.

Google has been eyeing this segment for a while; we all know that.  The best way to beat the competition is to be a step ahead of them. this strategy Google has been adopting in every venture it undertakes, so far it has been successful .

Challenges

There should be a good amount of deals to keep people coming back, and they have to be relevant and east access for users.

Right now, Google Offers is still rolling out with more of a daily deal approach. But as Living Social and Groupon move toward more real-time instant deals, Google will need to step up and get more deals going in a more timely manner.

Google Wallet

The interesting thing will be to see how the Dealmap affects Google Offers. It’s an important priority for the company that’s being paired with its near field communication Google Wallet product. As the service expands to more cities, Google will have to show it can continue to source a good volume of deals and maintain engagement with users.

The Dealmap was popular for helping people find and discover local deals, and it seems like that experience should be helpful in building a better local discount offering. It was able to get a pull together a lot of deals: more than 400,000 deals and $10 million in savings available each day. That will be important to ensure that Google Offers scales well.

 Source: PC World,  GIGAOM, Programable web, BuzzIT, RTT News,

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