Cheap drinks, everyone: Bartab gets you a $1 cocktail

Spending too much time on Facebook? Need to get out but stuck in front of the computer? Why not invite your Facebook friends out for drinks by saying the first round is on you?

Bartab is a new, Facebook Connect-based iPhone app designed to let users buy $1 drinks for their friends in select bars in San Francisco. To be clear, the one-buck offer stands only for the first drink of the night, after which patrons are paying full price for whatever they decide to order next. That said, it serves as a nice incentive to go check out a new bar or enjoy a cheap round at a regular haunt.

The way it works is simple. Bartab is connected to a user’s Facebook account, and to send a drink to a friend, all a user has to do is sign up on Bartab, link a credit card to the service, and buy a drink. The recipient gets a message on their Facebook “Wall”, an email, or a text message if they are not already a Bartab user. To redeem the drink, the recipient goes to the bar or restaurant and uses the iPhone app or replies to the Bartab text message to get a digital drink ticket, which must be presented to the bartender within five minutes of getting the reply from Bartab.

What’s cool about the app is that it takes a social network like Facebook that’s usually all about virtual goods and experiences and brings it into the real world with real goods – drinks – and actual social activities, physically hanging out with friends. Bartab was originally born out of a frustration with Facebook’s virtual nature. The founders wanted to offer users something tangible. Webtab, a San Francisco, Calif.-based company, acquired Bartab earlier this year and launched it in the App Store at last month’s WWDC conference. The service has 20,000 active users on Facebook and over 7,000 iPhone app downloads in its first month. There are over 70 bars partnering with Webtab in San Francisco, and the company says the number is growing daily. Webtab also plans to take the app to New York City and Los Angeles over the summer.

Bartab has a very straightforward business model. Users pay Bartab one dollar to send the drink to a friend (or themselves), and that is money in Bartab’s pocket. The person who redeems the drink at the bar, pays the bar one dollar, which is money in the establishment’s pocket – according to Webtab, enough to cover the pour cost of most alcoholic beverages. Webtab is building on this exchange but is also looking for other opportunities.

“We will include other forms of revenue, including [partnerships with] liquor distributors and beer companies. A few have contacted us and want their brands to be the offer of choice,” said Arthur Gross, Webtab’s vice president of business development.

There already are many other couponing or special-deal models out there, including GroupOn or LivingSocial, or the special offers Foursquare, Brightkite and the other location-based services are giving to their users as rewards in co-operation with brands like Starbucks. Gross said most other services give only a fraction of the online deals to the businesses, whereas with Bartab, the deal is one dollar and that’s what the establishment collects, not taking a loss. And, as with other coupon or special-deal services, bars and restaurants stand to gain new customers and visibility because Bartab users effectively advertise businesses to their friends on Facebook.

Webtab has 10 employees and was founded in 2009. The company has received $1.5 million in funding from undisclosed Silicon Valley angel investors. Bartab originally won a grant from FbFund in 2008, a program Facebook has set up for developers building Facebook apps. We’ll see if the app will scale, but for now, it seems like a fun way to go out with old friends — and possibly make new ones.

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