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Google Offers to launch tomorrow in Portland, Ore.

Eric Schmidt demonstrates the Web giant's new daily deals service on stage during the D9 conference.

Screenshot by Steven Musil/CNET

Google Offers--the Web giant's Groupon challenger--will launch tomorrow in Portland, Ore., Google Chairman Eric Schmidt announced this evening.

Schmidt and Stephanie Tilenius, Google's VP of commerce, demonstrated the new daily deals service at the D9 conference in Rancho Palos Verdes, Calif., showing a $3 coupon that yields $10 in Floyd's coffee. The service is expected to rollout later this year in other cities, including New York and San Francisco.

Like Groupon's service, Google Offers users can receive discounts of 50 percent or more at local businesses, but the deals won't need to hit a user threshold before they're valid.

Google Offers was officially introduced Thursday, along with Google Wallet, which will allow users to pay for retail purchases by holding their Android smartphones up to a specialized reader at checkout counters point of sales. The service taps near-field communications technology (NFC), which lets devices exchange information wirelessly with one another over very short distances, about 4 inches.

Google Offers and Google Wallet, which is expected to launch later this summer, will combine coupons and discounts and payments at the time people make purchases through their phone.

Google's ambitions for a daily deals service were revealed in January, a month after Groupon reportedly rejected the company's $6 billion bid to buy it. Groupon, which is rumored to be doing $2 billion a year in revenue, has since increased its coffers by raising $950 million in funding. Earlier this year, the company was valued at about $6.4 billion.