Ian Duncan

On a recent afternoon, Sumana Ramakrishnan, a 21-year-old student with her eye on a pink frosted cupcake, stepped up to a cash register inside Butter Lane and reached into her pocket. But instead of pulling out her wallet she tapped on her smart phone and showed it to the knowing cashier. There would be no charge, it turned out, for Ms. Ramakrishnan’s cupcake. Hers was one of more than 800 that had been given away in February by means of a promotional website.

The site, Tenka, is among the newest of a host of such sites seeking traction in the East Village. It was started in October by Nhon Ma, a former Google operations manager, who said he targeted the East Village because of its density of small businesses and population of Web savvy young people.

“The East Village is fiercely competitive relative to other areas,” said Mr. Ma. “Tenka deals really resonate with merchants because they are able to see the power of social recommendation.”

Tenka is a cell phone-based online service that lets customers redeem coupons for free items at participating stores. Tenka charges merchants to create a deal. The merchant chooses how many coupons they want to offer, and Tenka promotes it on its site and across its users’ Facebook pages.

Many of the small business owners who turn to deal sites, and other forms of social media, do so because they don’t want to spend money on other forms of advertising.

“From the beginning our strategy was, what kind of marketing can we get for free?” said Maria Baugh, co-owner of Butter Lane. “Having no marketing budget, a lot of social media opportunities were great for us.” Read more…