Google readies Groupon competitor

Just a month after being rebuffed in a buyout offer of Groupon, Google is preparing to launch its own social-buying competitor called Google Offers.

The venture "is a new product to help potential customers and clientele find great deals in their area through a daily email," according to a fact sheet first published by Mashable.

A Google spokesperson confirmed that the Internet giant was actively recruiting businesses for a daily-deals offering.

"Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program," the company said in a statement. "This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted."

The social-buying model offers a "deal of the day" to users, usually at a significant discount on a sought-after product or service in their city or town. Google is interested because deals are geared around specifically targeted local markets, which is seen as a big source of future Internet advertising growth.

Google did not indicate when it expected to launch, but it is playing catch up in the sector after reportedly trying to buy market leader Groupon for as much as $6 billion before being rebuffed last month. Groupon, which is rumored to be doing $2 billion a year in revenue, has since increased its muscle by raising $950 million in financing, giving it a valuation of about $6.4 billion.

In addition to Groupon, Google will have to contend with a host of "Groupon clones," including Amazon.com-backed LivingSocial, which recently made headlines and fans by selling more than a million $20 Amazon gift cards for $10 each. LivingSocial said last month it is "currently booking revenues of more than $1 million a day on average and is projected to book well over $500 million in revenue in 2011."