Facebook unveils Deals program for mobile phones

Facebook denied rumors that it was developing its own phone Wednesday, but it did announce it was rolling out an ambitious bid to extend its popularity on the desktop to mobile phones.

The social networking company said a new Deals feature would allow merchants to deliver coupons and specials to Facebook users' phones.

One of its first 22 partners is Gap, which is running a campaign that offers a free pair of jeans to the first 10,000 users who check into their local Gap store. Other partners include Macy's, the Palms casino in Las Vegas and Starbucks.

Eventually all companies with Facebook pages will be able to offer deals to Facebook users on their mobile phones. The deals will include one-time offers and loyalty rewards as well as deals that reward customers who bring their friends. Facebook is banking that merchants will be able to reward repeat customers and lure new customers who happen to be nearby.

Mark Zuckerberg, the company's founder and chief executive, said 200 million people now access Facebook through its mobile application, a threefold increase since last year. Mobile users are also twice as active on Facebook as people who are logging on via personal computers.

The idea is to tap into that trend by making the social networking service easily available to people when they are away from their computer. Chief Technology Officer Bret Taylor predicted mobile usage would eventually eclipse the desktop.

The increase in mobile use gives Facebook an opportunity to reach people wherever they go. In August, Facebook rolled out its own location service, Places, which lets users share where they are and spot which of their friends are nearby. It declined to discuss how many of its 200 million mobile users were using the service. Zuckerberg said Places was "multiples larger than any other location service."

Debra Aho Williamson, a senior analyst at EMarketer, said, "We have been talking for years from a mobile perspective about businesses being able to push deals to people in proximity to the business. Facebook is making that available for the first time on a mass scale."

Analysts say the Deals program could accelerate Facebook's push into mobile. A number of companies, including Internet giants Google Inc. and Yahoo Inc., location service Foursquare Labs Inc. and online retail service Groupon Inc., are aggressively pursuing the local market by targeting people on their mobile devices. Such services are competing for a share of mobile advertising revenue, which is expected to increase in the U.S. to $3.1 billion in 2013 from $320 million in 2009, according to market researcher BIA/Kelsey.

"It starts to solve an age-old problem that local businesses have always had," said Emily White, director of local at Facebook. "They've been told they need to be online. But it hasn't always been clear what the benefit is. That's what this Deals platform allows. It's turning those fans, those visitors, those eyeballs into real dollars, real people and real business."

Facebook says it has no immediate plans to generate revenue from the Deals program — it's just to make the location experience more compelling for users and businesses — but it could eventually turn into a moneymaker for the company.

"Facebook Deals … has the potential to really shake up the mobile market because of the company's reach and influence," said Greg Sterling, principal analyst at Sterling Media Intelligence.

Facebook also showed off a new single-click sign-on feature that links Places with other location-based services such as Yelp, making it easier for users to see where their friends have been and what places they have liked even if they have checked in using another service.


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