April 19, 2011, 11:17 AM

Groupon gets hyper-local

The daily deal company buys Pelago, creator of the check-in service Whrrl.

Lead Photo

Groupon has acquired Pelago, creator of location-based check-in service Whrrl. The deal is the latest sign that the daily deal space is converging with geolocation, making it possible for businesses to present offers to consumers based on where they are.

The move comes a little more than a month after LivingSocial, Groupon’s primary rival, began testing a mobile app feature that lets consumers search for deals within a half-mile radius of their current locations.

In announcing the acquisition, Groupon CEO Andrew Mason praised Whrrl’s platform, which allows users to share recommendations for activities and places to go. When others heed that advice the recommender earns “influence points.” Brands and merchants can encourage consumers to visit the promoted bricks-and-mortar locations by offering contests and prizes to people who check in at those locations.

“Their obsession with real-world serendipitous discovery, or ‘Anti-Search,’ is core to Groupon’s mission,” Mason  wrote in Groupon’s blog. “It’s about discovering what you didn’t know you didn’t know, right in your own backyard.”

With the acquisition, Pelago CEO Jeff Holden will assume a new role overseeing Groupon’s product development, or “Grouponnovations.” The daily deal site will shut down Whrrl on April 30. Other Pelago employees will also work with Holden’s team. 

“The opportunity to take the collective brain power and technology of our two companies and point them at a phenomenon already at huge scale is impossible to refuse,” wrote Holden in Pelago’s blog.

Groupon was already focused on location-based offerings. The company’s mobile app has a localized "Groupon Now" feature that allows a consumer to click either "I'm hungry" or "I'm bored." He is then presented with options based on the time of day and his location. Groupon also began delivering local, personalized Groupon deals to mobile users who have downloaded the ShopSavvy app in February.

Terms of the deal were not disclosed.

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