Yahoo Tests Local Commerce Service With Groupon

Yahoo! Inc. said it’s testing a service that delivers coupons and discounts for local businesses from partners including Groupon Inc. and LivingSocial.com.

The program, called Local Offers, will include deals from about 20 providers, Sunnyvale, California-based Yahoo said today at an event in San Francisco. Yahoo is testing the service in the U.S. and will share revenue with its partners.

“There are far too many offers and not enough people seeing them,” Matt Idema, vice president of Yahoo! Local, said at the event. “We can help put the right offer in front of the right person.”

Chief Executive Officer Carol Bartz aims to keep users on Yahoo pages longer and fend off a rising threat from social networking sites such as Facebook Inc. Groupon has amassed more than 20 million users and is raising venture capital that may value it at more than $3 billion amid booming demand for daily discounts sent via e-mail.

“We’ve put together a group of, we think, winners in various niches of this deal-and-coupon space,” Bartz said at the event.

Yahoo slipped 36 cents, or 2.1 percent, to $16.24 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has declined 3.2 percent this year.

The company didn’t elaborate on financial terms of Local Offers.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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