About 15 sales people in Yelp's daily deals business are being re-assigned, Bloomberg reported Monday. On Friday, Facebook said that it was closing its own daily deals service after four months.
The moves raise increasing questions about the proliferation of daily deals websites. Groupon, which has filed for an IPO, and LivingSocial are the leaders in the space. But dozens and dozens of other sites have popped up offering similar deals. And other existing companies such as OpenTable, daily newspapers and travel websites have jumped into the fray.
The result is daily deal fatigue. About 52% of people surveyed in an Experian Hitwise report said they were overwhelmed by all the deal emails they get. From the peak week in June, overall traffic to daily deal sites was down 25%, according to the report. Traffic to Groupon was down nearly 50%, while traffic to LivingSocial was up 27%. This report does not include mobile or app traffic.
Yelp launched the deals service last year and expanded to 20 cities this year. Yelp will apparently continue to offer some discount services for merchants, but it was unclear what those are. Yelp has an extensive advertising program for merchants on its site.
For Groupon and LivingSocial, how do they keep people buying deals, or even opening emails in the long-term? And for others in the space that don't have the scale of these two companies, the questions are tougher. If Facebook and Yelp can't make it work, how can these smaller competitors?
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