Local Search Insider

The daily deals space saw a huge shakeup this week, with news that some players are scaling back or eliminating their offerings, while the popularity of two top sites is changing rapidly.

Here’s a rundown of what we’ve seen:

• Four months after launching what it described as a Groupon-killer, Facebook announced on Friday that it is eliminating Facebook Deals, its daily deals offering in five cities. In a written statement, Facebook said, “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.” Despite the move, Facebook will continue to offer its check-in deals – discounts that show up when users share their locations on the site.

• Yelp announced yesterday that it is scaling back its year-old Yelp Deals service, cutting the offering’s staff by half. In its statement, Yelp said that it planned to focus its offering on “good, quality opportunities” and that deals have “never been a core focus of our offering.”

• Groupon, the leading daily deals site, has experienced a traffic decline of nearly 50% since its peak in June, according to Hitwise. Meanwhile, LivingSocial, its top competitor, saw a 27% increase in visits to its site.

Given how new daily deals are to advertisers and consumers, the fast-changing nature of this segment is to be expected. As you may recall, just this month Google acquired The Dealmap, a daily deals aggregator, after launching its own Google Offers beta site in April. There’s no doubt that our industry will continue to invest in this segment, which is gaining traction and already changing the way local businesses advertise.

We’ll continue to keep a close eye on changing developments in the daily deals space and talk about them here on the blog. For starters, we’ll be live-blogging at BIA/Kelsey’s DMS ’11 event next month, which will include an interview with Todd Rose, VP of Business Development, AT&T Interactive about his company’s daily deals offering.  We hope you’ll be joining us in Denver.

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