Deal or No Deal: Facebook, Yelp Cut Daily Deals Services

  • Share
  • Read Later

Selective shoppers looking to save some money thanks to the Internet, beware: This particular sale may be ending sooner than you’d expect.

In the last week, not only has Facebook discontinued its Facebook Deals service, but Yelp is also rumored to be planning on “scaling back” its own Yelp Deals service, with 50% of the workforce being laid off in the process. Is this the beginning of the end of the Daily Deal?

(MORE: Groupon Posts $103 Million Loss in Last 3 Months)

Facebook gave no reason for ending its Deals service, although in the announcement of the closure, the four-month-old service was described as “a test” (presumably not a very successful one). Yelp, meanwhile, has described the reduction of its service as a refocusing of strategy that allows it to focus on “good” deals instead of being forced to offer ones of “inherently declining quality.”

Likely, both companies are reacting to the flooding of the market of Daily Deals offerings at a time when participating businesses are learning that offering deals is no guarantee of increased sales or profits and traffic to such deal sites is down 27% across the board. With industry leader Groupon reporting massive quarterly losses and a 50% drop in traffic (though things are apparently good over there), it’s possible that these two withdrawals from the Daily Deal space are just the first of many we can expect in the weeks and months to come.

MORE: Glenn Beck’s New Discount Site Has ‘Value and Values’

Graeme McMillan is a reporter at TIME. Find him on Twitter at @Graemem or on Facebook at Facebook/Graeme.McMillan. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.