What the Starbucks Square deal really means

By now, you’ve probably heard that Starbucks is going to be investing $25 million in Square, the San Francisco-based mobile payments company. As part of the deal, Starbucks will switch its credit and debit card processing to Square in the United States. But once you get past the headline, what does this really mean?

PayPal wants to be here, there and everywhere

PayPal is the granddaddy of the online payments space. It was the remora of eBay until the auction giant bought it in 2002. Last year, PayPal processed $119 billion in transactions and accounted for 38% of eBay’s revenue. In the past year, eBay’s stock (+52%) has well outperformed Google (+11%), Amazon (+16%), Facebook (-45%) and Groupon (-75%) as of Friday’s close. (Disclosure: I have options against Facebook and Groupon. Facebook’s and Groupon’s numbers are based on their respective IPOs.)

Google Wallet: Leave home without it

Sometimes companies do something just to feel like they’re making progress, even if that something makes no sense. That’s the only way I can rationalize what Google is doing with the latest twist on its Wallet initiative.

The future of local is real time and mobile

Since the mid-1990s, entrepreneurs have been trying to tackle the local market. Many have failed. Others, like Yelp and Groupon, have been successful selling services to small businesses, but those services are of dubious value. (Disclosure: I have puts against Yelp and Groupon.)

Groupon tries out creepy new deal: tuck ins

Groupon today launched a unique deal: You can have a Groupon employee come and tuck you into bed. As far as strange deals go, this one even beats out the deal offered by Groupon Philippines for 76% off circumcisions. (Disclosure: I have options against Groupon.)

Groupon investors race for the exits as lockup ends

Groupon shares dropped to a new all-time low today as its lockup ended, releasing a torrent of new shares onto the market. Thirty minutes into the trading session, Groupon had already traded 75% of its average daily trading volume. This was Groupon’s third highest volume trading day. (Disclosure: I have various puts against Groupon.)

Bay Area companies get another nonstop flight to Capitol Hill

San Francisco is going from zero non-stop flights to Washington National Airport to two non-stops this summer. Virgin America announced today that it will start its service to the airport just a few miles from Capitol Hill on August 14.  United started service on the route two weeks ago. Flights from San Francisco to Washington National had been illegal for more than 40 years. Virgin America got a much coveted exemption to the airport’s perimeter rule.

AmEx’s new local offers pose threat to Groupon

American Express is releasing a new version of its iPhone app today that lets users find offers at nearby businesses. The new feature, dubbed “My Offers,” represents a threat to Groupon, which has tried to entice merchants to market through its mobile product, Groupon Now. (Full disclosure: I have a very small stake in AmEx and a variety of short positions in Groupon.)

Study: Groupon’s merchant quality is on the downslide

Have you had the feeling the quality of Groupon deals is going down? If so, you’re right. A report released this morning by Giorgos Zervas, a postdoctoral fellow of computer science at Yale University, shows that the average rating of a Groupon merchant before a deal runs is declining as Groupon matures. Zervas and other researchers had shown earlier that a business’s individual Yelp ratings dropped after running a Groupon. Yelp ratings by Groupon customers were, on average, 10% lower than those of their peers. (Disclosure: I met Zervas after the initial study and offered my theory that the average Yelp rating of merchants featured would be declining.)

Doing deals the right way

I’ve voiced quite a bit of opposition to the daily deals industry, but that doesn’t mean I’m opposed to discounting in general. Discounting can be an important part of the marketing mix, especially for encouraging trials.