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Facebook ends Deals in a move that bolsters Groupon’s lead

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Facebook announced Friday that it will end its Deals program, the network’s answer to Groupon and other daily deals sites. The program is being dropped after four months of testing in select markets in Texas, California and Georgia.

The network will discontinue the program in the “coming weeks.”

“We think there is a lot of power in a social approach to driving people into local businesses," Facebook said in a statement to the Associated Press. "We've learned a lot from our test and we'll continue to evaluate how to best serve local businesses.”

The move is particularly good news for Groupon, which analysts thought would lose its position as the daily deals leader once companies such as Facebook and Google launched their own versions of the service.

Groupon filed to go public in June. Since then, it has been a prime target for analysts looking for proof of a tech bubble

In an letter to employees obtained by All Things Digital, Groupon CEO Andrew Mason all but laughed off competition from Facebook, Google, Yelp and Washington D.C.-based LivingSocial, saying that it’s “a lot harder to build than people realize and our scale creates competitive advantages that even the largest technology companies are having trouble penetrating.”

Facebook will continue to offer check-in deals to users who share their location with friends.

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