This Deal Has Ended: Facebook Kills it’s Deal Program

After only four months of testing it’s Groupon competitor, Facebook has decided to shut down its daily Deals product. Deals were only rolled out in five cities (Atlanta, Austin, Dallas, San Diego and San Francisco). While there are currently deals still offered on the site, the social-networking giant said it plans to ramp down the product over the next few weeks.

Facebook is shutting down its Deals product after only four months.

“We think there is a lot of power in a social approach to driving people into local businesses,” Facebook told Reuters.  “We’ve learned a lot from our test, and we’ll continue to evaluate how to best serve local businesses.”

Facebook didn’t readily offer an explanation for axing the product, but one factor could be customer fatigue when it comes to daily deal sites. According to Experian Hitwise, Groupon experienced almost a 50% drop in traffic since the middle of June 2011, and overall daily deal sites and deal aggregation sites were down 25%. The only big gainer in the field was Living Social, which saw a 27% increase in traffic during the same time period.

Facebook hasn’t given up on local altogether. It’s Check-in-Deals, which was a subset of its Places feature that it announced earlier this week that it would also be discontinuing, is still up and running. Facebook Places allows customers to “check in” at local businesses to receive special discounts, coupons and free merchandise.

So it looks like Facebook is taking a step back and reshuffling its cards a little, but certainly not giving up on local business.