Google is allowing local businesses to offer coupons through Google Maps for free (some details from Google here), which is pretty good from the perspective of Google’s hallowed “user experience,” but far from revolutionary. Local searchers on Google Maps will be able to see which local businesses featured in the search results are offering a coupon. They will also be able to see relevant AdWords ads on Google search results from local businesses that are offering coupons but which might not have a web presence.

That’s certainly progress. But here’s a consumer need that isn’t being fulfilled: Which local businesses that offer the products/services I need are offering the BEST coupon deals?

Here’s the real problem: When local businesses use AdWords to promote their Google-hosted coupons, they will be taking some of the money that could have gone to consumers and instead paying Google to promote the coupons. Businesses will have to weigh how much they want to give to consumers through the coupons against how much they need to bid on AdWords keywords to drive traffic to the coupons.

So consumers are getting deals — but not the best deals. And businesses are competing — but on keyword bids, not on giving consumers the best deals.

Lending Tree’s tagline is: When Banks Compete, You Win

The tagline for Google Coupons should be: When Local Businesses Compete, Google Wins