Facebook Backs Down In Its Challenge To Groupon

Facebook Deals, the four-month-old effort to compete with Groupon and LivingSocial, is on the way out. The social networking site plans to sever its daily deals arm in the coming weeks.

In an email statement to Reuters, the company said:

“After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks. … We think there is a lot of power in a social approach to driving people into local businesses. We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.”

Facebook is still determined to play middleman in between customers and local businesses, sticking with its standard ad offerings, including allowing users to check in at businesses to potentially receive discounts and other offers.

Facebook ending Deals product after four-month test [Reuters]