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Google and Facebook Squash Groupon

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    NEWSLETTERS

    Merchant Circle

    More than 8,000 U.S. business owners were surveyed about their online ad purchases and 70 and 62 percent bought ads with Google and Facebook, a merchant quarterly survey reported. About 42 percent of merchants also didn't seem to know what Groupon and Foursquare were.

    Google Places and Facebook Places, with 51 and 32 percent of those reporting using the service respectively,  also fared better than either Groupon, Yelp or Foursquare, according to the Merchant Circle Merchant Confidence Index.

    Facebook Places, which launched in August, was the surprise winner in the survey taken from Jan. 22 to Feb. 1. The Facebook application allows users to check into businesses and share their location online. It also allows users to be alerted about local discounts or specials. Facebook Places was also created to go head-to-head with location-based startups like Foursquare and Gowalla, both of which only received a paltry 12 percent of business combined -- almost a third of the Facebook Places take.

    Groupon, the Chicago discounting startup that rebuffed Google's $6 billion offer, managed only 6.6 percent of business, even less than Foursquare. Only 14.3 percent of business owners had never heard of Groupon, but even more -- 27 percent -- had never heard of Foursquare.

    I stand by my assertion that Groupon made a horrible mistake in not selling to Google and that it will continue to lose momentum and market share.