Google Inc is preparing to test a new prepaid coupon and offer service in a bid to better compete in the fast-growing market for local online advertising, the Wall Street Journal reported on Sunday.

The world's top Internet search company is talking to small business owners to solicit their support for a test of an offers program, the report said.

The effort is dubbed Google Offers, and was first reported by the blog Mashable. Google did not immediately respond to a request for a comment.

Google's move comes in the wake of the company's failed bid for startup discount-coupon sensation Groupon last year. Google offered $6 billion for Groupon but was rebuffed, according to several news outlets.

Groupon -- called the fastest-growing Internet start-up in history -- sends its members daily e-mails with about 200 discounts for goods and services. Its subscriber base is expected to grow to 25 million in 2011 from 13 million in 2010.

A daily deal service would help Google make inroads into a local advertising market that is estimated to be worth $91 billion, analysts have said.

In a surprise announcement Thursday, Google said founder Larry Page will replace Eric Schmidt as chief executive officer in April.

(Reporting by Gabriel Madway; Editing by Bernard Orr)

Eric E. Schmidt Larry page Marketing Advertising