At left, Brightkite Starbucks badges, at right, a Starbucks Mayor Offer on Foursquare

For those who don’t know Foursquare, it is a social network based around your location.  Using the Foursquare app on your smartphone of choice (native apps available for iPhone, BlackBerry, Android and Palm WebOS phones) you “check-in” to locations, and can see other people who have visited and what they say about it.  By checking in more than anyone else, you become the mayor of a location.

Mayors have typically been given special advantages, being able to cut in line, a free drink or two, and other discounts to name a few.  Now, Starbucks is offering discounts to any mayor of a specific Starbucks.  The deal is $1 and “NEW however-you-want-it Frappuccino blanded beverage.”  The deal is good until June 28.  It may not seem like much, but Starbucks isn’t exactly known for frequent discounts.

If your allegiance is with Starbucks and not a particular network, Foursquare competitor Brightkite was actually first to partner with the coffee mega-chain on Frappucino focused badges, though initially there were no special discounts. {TechCrunch} If one Frappucino isn’t enough, check in with both services though, and in the future you could find yourself with double discounts. Brightkite wouldn’t get into specifics, but hinted that there was more to come beyond the profile decoration. {Brightkite blog}

It seems that Starbucks is really going all in with location/mobile focused social networks.  It will probably be a few months before results of the programs are announced, but it serves as great publicity for both Starbucks and the networks.  As the networks start battling it out to be the mobile check-in app of choice there’s bound to be some overlap, but it will be interesting to see how they differentiate themselves going forward.

Foursquare screenshot via {Mashable}

Launched 10 months ago, BuyWithMe already sees 110,000 visitors per month (according to Google Ad Planner) which is impressive for a site that’s been around for less than 10 months. Impressive until you find out that 18-month old Groupon receives 5.1 million. How do you grow a website in a market where the leader has an 8-month head start, deep pockets and first mover’s advantage?

Buy With Me CEO Cheryl Rosner

“Our purpose is supporting the local communities we’re in,” says CEO Cheryl Rosner. Throughout our conversation Rosner, a former president of Expedia and Hotels.com, emphasizes the focus on creating value for merchants and buyers. “Our position is consistent. It’s to know our consumers well, to create local experts. What we find is that since we have such a strong reputation, the type of consumer we deliver has encouraged a lot of merchants to work with us.”

But when another site is around the corner, able to offer an even larger flood of shoppers, is that enough to give BuyWithMe a competitive advantage for unique offerings? For Jamie Ahn, owner of Manhattan’s Townhouse Spa, it is.

“From what I’ve seen, the quality of their clients is similar to our existing clientele. There’s a lot of crossover, which is a good reflection. We want people who return, not just people looking for discounts,” says Ahn, who was also approached by Groupon but decided to go with BuyWithMe instead.

A quick search turns up a review on Yelp that shows that it’s a position that works for consumers as well.

“Went there tonight after buying a package at http://www.buywithme.com… After a long week of work this was an absolute treat!! I plan to go back!” – Pedro M. via Yelp

The smaller, targeted audience that BuyWithMe offers was actually an advantage for Ahn. “That short term gratification (of a high volume sale) can kick you in the butt depending on what business you’re in. Another spa sold 3000 massages on groupon, but most people will book during peak hours like all other clients. So you’re going to lose out on existing clients in the long run.

You get that amount in one check right away, but you don’t want clients feeling like they’re 2nd tier either and complaining to both establishments. We did a lot of research and looked at our capacity, looked at the model with other businesses they had. It was high enough that we didn’t have 1000 people we didn’t want, but the clients who purchased the deal would get the same service we usually provide. We don’t want to compromise on quality and BuyWithMe worked with us on adding value rather than cutting the price down to a level that we couldn’t sustain long term.”

Indeed, one of the frequent comments on articles discussing Groupon focus on the sustainability of the model for the merchants offering the deals. For small businesses who don’t have multiple locations or the staff levels to handle a sudden influx of thousands of new customers, BuyWithMe’s smaller size could prove advantageous when targeting local partners. For shoppers, knowing that there won’t be a backlog of appointments or reservations could easily make the offerings on a smaller site appealing.

“We currently work with partners in different markets,” says Rosner. “In San Diego we work with the local ABC affiliate, in Boston we work closely with Boston.com and have since founder Andrew Moss started the business. We’ve found that’s a very valuable and good way for us to enter a local market.” By year’s end, BuyWithMe has plans to expand from 4 cities (Boston, New York, San Diego and Washington, DC) to 20.

While they are likely markets that their larger competitor already exists in, a focus on local partnerships and more manageable responses for small businesses could easily leave room for multiple local deal sites to successfully co-exist. In fact, as the number of local deal sites continue to grow, the stiffest competition may come from a site like Gilt City rather than Groupon. Rosner’s had success in establishing sites in the very crowded, very competitive travel market before though, so don’t discount Buy With Me just yet.

Apparently, we’re not the only ones who noticed.

A screenshot of a wine tasting deal on Gilt City

As of a few days ago, Gilt is now offering Gilt City, a New York specific section of the popular site dedicated to deals on local experiences ranging from a 3-course meal for two at Rouge Tomate, to frozen yogurt at 16 Handles and discounts on salon services at Vartali Salon.

There are notable differences from Groupon: offers are updated weekly rather than daily, but there are multiple deals rather than a single one and merchants can offer multiple options. {TechCrunch}

Vartali Salon, for example, offered two haircut deals, a Keratin/Brazillian straightening offer, and a 3-step processs. Both of the haircut offers have sold out, as has the 3-course meal at Rouge Tomate, and orchestra seats at the musical A Little Night Music starring Catherine Zeta-Jones.

Gilt’s significant existing user-base means that unlike other Groupon competitors, they’ll be able to launch with built-in demand in enough cities to pose a solid offense. With many people questioning how long the excess merchandise will last, and what will happen when there are no longer enough true clearance items to satisfy growing demand, this seems like a good way to increase overall sales when growth in the discount designer fashion segment hits the predicted wall.

One company that seems like a natural fit for the model is Daily Candy. After their acquisition by Comcast, the newsletter that offers daily snapshots of fashion, food and fun added sample sales to compete with Gilt, but the Groupon model would certainly make even more sense for the locally-focused company. We’d be surprised if there isn’t some kind of announcement from Daily Candy before the end of this year.

In addition to the existing shopping sites, newspapers like the San Diego Union Tribune have been eyeing Groupon style business models as a way to offset declining classified advertising revenue. So in addition to Gilt and Groupon (and Daily Candy, if they move quickly), we wouldn’t be surprised if New Yorkers could soon have the option of deals from New York Magazine, the New York Times, the New York Post… There’s certainly no shortage of print publishers who are looking for ways to make more money from their online operations, and with Groupon’s revenue growing almost as quickly as the number of competing sites, their model makes an attractive target.

These coupon 2.0 sites all operate on a very similar premise: the “tipping point.” They understand that, in these recessionary times, consumers aren’t just looking for deals – they’re looking for killer savings. They also understand that companies aren’t going to slash their prices unless they’re guaranteed a slew of customers to make it worth their while. The result? Online shopping that harnesses the power of collective buying to get you the best possible price around.

Here’s how it works. These hyper-localized sites negotiate an amazing deal with a restaurant, salon, dance studio, driving range, etc., near you. For a limited time frame, they offer the deal on their site. As soon as enough people commit to buy – and the “tipping point” is reached – the deal is on. And you just got a coupon for 50, 60, even 90% off that you can redeem at your leisure.

Sound good? Well, we won’t leave you with all that new found knowledge without telling you how to put it to good use! We’ve found the best of the collective buying sites and ranked the top 5 according to the number of locations, time frame, average savings, and (very scientifically) general coolness factor.

#5: CoupMe

Locations	Time for Deal	Savings	Coolness

It may not be the sexiest site, but CoupMe does have one feature that sets it completely apart. Every month, 5% of its profits go to a different charity. So while CoupMe is on par with your typical collective buying site (50% savings, a 24 hour time frame) and is only based in Boston, this is the only site to go to if you want to make a purchase for a cause.

#4: LivingSocial Deals

Locations	Time for Deal	Savings	Coolness

Available in Boston, New York, and Washington D.C., Living Social is a site for the kind of person who has over 400 Facebook friends (come on, can you really know that many people? really?). Brought to you from the people who created LivingSocial, a site that lets you rank, review, and share your favorite finds with your friends, LivingSocial Deals hopes to harness the power of their social network to sustain their deals. While the savings are above-average, hovering at about 55% off, the real steal is the free deal you get when three of your friends buy!

#3: BuyWithMe

Locations	Time for Deal	Savings	Coolness

If you’re the kind shopper who finds yourself getting heart palpitations at the strangely pressuring prospect of a 24 hour time frame, then check out BuyWithMe. With deals that can last up to a week, BuyWithMe gives leisurely (read: horribly indecisive) shoppers in Boston, San Diego, and Washington D.C. the time to ponder if this deal’s truly right for them.

#2: My Daily Thread

Locations	Time for Deal	Savings	Coolness

What MyDailyThread lacks in number of locations, it makes up for in awesome savings and cool editorial content. With its Atlanta-based companies carefully chosen and featured with in-depth reviews from the MyDailyThread writers,  you get deals that are only to places that truly embrace “the creative lifestyle.” Plus, with an average savings of about 60% off (the highest average we came across), you know that you’re guaranteed to have a great time – for a whole lot less.

#1: Groupon

Locations	Time for Deal	Savings	Coolness

Available in a whopping 35 cities, chances are that a Groupon is available to use at a store near you. Groupon was the original collective buying site and has grown exponentially since it started in late 2008. As a result, they’re getting better and better companies to spotlight with deals at better and better prices. With a cool, easy-to-use site and above average savings, Groupon is the site to check daily for the best and most varied deals across the country.

Read our in depth review of Groupon, with feedback from business owners and CEO Andrew Mason’s most memorable deals.