Regardless of its dysfunctional IPO, Groupon still is the dominant leader in
the daily-deals business. The fact is the small-business segment is a huge
opportunity. Many companies are trying to get a piece of the action, such as
Google (NASDAQ: GOOG ), Intuit (NASDAQ: INTU ) and Microsoft (NASDAQ: MSFT ).
But it can be tough to get traction. This certainly has been the case with
Facebook. Even with its massive user base, the company's small-business
strategy has been lackluster. Keep in mind that after several months it
suddenly nixed its daily-deals business. Now it looks like just a temporary
setback. Facebooks next idea to gain momentum? Offering up to $10 million in
free advertising credits to small businesses. OK, on its face, this might not
sound like much. After all, Facebook is generating billions of dollars in
revenues. Yet the company's program is more than just a digital giveaway. For
example, Facebook is partnering with the U.S. Chamber of Commerce and the
National Federation of Independent Business to provide education and support on
how to put together effective social advertising campaigns. Facebook even will
conduct town hall meetings across the nation (not virtual events). It's a
smart idea. For many small businesses, the biggest challenge is getting new
customers. So by learning new advertising techniques, this should be a big help.
What's more, it should be much better than Groupon's approach, which often
is expensive and mostly results in one-time surges in sales. Can you really run
a business this way? But with Facebook advertising, a small-business owner can
find ways to get a steady stream of customers with a fairly low spending
threshold. Of course, the same can be said of Google, which operates the highly
successful AdWords business. And now with its new G+ service, it already is
focusing on getting a bigger share of the small-business market. In other words,
it is yet another battleground for Google and Facebook, with Groupon trailing
away. Tom Taulli is the author of "All About Short Selling" and "All About
Commodities." You can also find him at Twitter account @ttaulli. He does not
own a position in any of the stocks named here.
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