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Google Starts Its Own Groupon for Location, Location, Location

Google (GOOG) launched its daily deal signup page -- its very own Groupon, because the deal king had spurned Google's $6 billion+ acquisition offer. Google will start a beta test service in Portland, Ore., and then spread out, trying to blanket the country in a warm fuzzy blanket of 50-percent-off deals.

But there's an undercurrent to all this: a silver flash under the surface of the water that promises a swift-moving predator. The creature is Google's massive collection of data centers and the prey is consumer location data. Location is valuable personal data, and the more it gets, the more money Google can make. Yum yum.

Google is being teasingly vague about what, exactly, its service will offer. All its marketing video provides is some clever animation and bad singing:


If Google can follow in the footsteps of Groupon and LivingSocial, it should be able to make money that doesn't involve slapping ads next to search results. That would be an improvement for the company. However, even if it doesn't make big money on big discounts, there is that additional benefit of gaining more personal data in the form of location.

As anyone who has dealt in real estate can tell you, there's money in the right location. And the location that rings tech company cash registers is location of users. That's why both Apple (AAPL) iPhones and Google Android-powered handsets regularly transmit location data back home, according to a Wall Street Journal analysis. The more a company knows about users, the more accurately it can target ads.

Ironically, getting location data on stationary computers is more difficult. There is no built-in GPS unit that can pinpoint location within a few feet. Too many people have Internet connections with dynamic IP addresses, so there's no certainty in mapping a set of numbers to a person. Furthermore, because ISPs can manage connections regionally, people might appear to be in one city when they are actually miles away.

The way you get location from people is to have them provide it, and daily deals are a good way to do this. As most of the deals are local in nature, people want the ones near them, or in places they frequent, so they sign up for the appropriate city. Now Google can associate email with location, and any cookie data that it leaves on a computer, whether a user is logged in to Google's services or not.

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