Since launching in November 2008, Groupon has seen insane growth.

“A year ago at this time, we were in 5 or 6 cities,” the social-coupon site’s CEO Andrew Mason said this morning at TechCrunch’s Social Currency Crunchup. “Now we’re in 170 cities and have about 5000 users,” Mason said. “Now we have 12 million users, and are adding 50 employees in the U.S. every month.”

Groupon started in a completely different space: as an organizing and action space.

“It started as a way for one person to get several people to help do something, for example, we had a group raising funds to build a dome over Chicago for winters,” Mason said. “But people were also using the site for buying things, so we introduced coupons for revenue.”

“The success took us by surprise, too,” Mason said.

The first few things Groupon tried to sell didn’t work.

“We had these slippers with flashlights,” Mason said. “About half of the people who bought them sent them back.”

Flashforward from that failure to this figure: 97 percent of businesses who are now featured by Groupon want to be featured again.

“Businesses see it as the most important form of local advertising there is,” Mason said. “They’re not handing over a check, but only paying when a customer walks in the door. For merchants with a low marketing budget, it’s great. “

Groupon sees its role as larger than that of just a coupon provider.

“We’re like a city guide, but we have this deal to nudge people to do things,” Mason said.

Mason wants Groupon to promote local hidden gems. You can think of it as a carrotmob at a glacial scale.

Chances are, Groupon won’t be around forever, seeing as its success is dependent upon social tools that will soon become vestiges. But it’s perfect for the content-sharing Web 2 moment.

Another part of Groupon’s success is that the majority of people who purchase a groupon, use it.

“We don’t build ourselves around breakage, because we think that’s a bad business model,” Mason said. “About 10 percent of customers don’t redeem coupons. Businesses don’t want breakage. “

“The stuff that we’re selling is inherently social,” Mason said. “There’s a natural incentive to share it with people, and Facebook and Twitter make it frictionless model to share.”

Even though Groupon is less than two years old, there are already more than 500 Groupon clones. But Mason doesn’t mind this, and actually thinks there is a place for them.

“The reason a business turns to the clones is because we’ve turned away that business,” Mason said.

(Update: December 10, 2009: Stribe won top honors at this week’s Le Web in Paris)

It all started with sports.

After running a semi-marathon a few years ago, Kamel Zeroual wanted to keep in touch with the community that had been created at the event. But there was nothing online, not even a Facebook page.

“We said ‘OK, it’s a pity. We shared interests, spirit,’” Zeroual says of the lack of tools to reconnect the community that had participated in the race.

So Zeroual created those tools. The result, Stribe, is the first French startup to be named finalist at TechCrunch50.

“Getting selected for TechCrunch50 is like graduating from school,” CEO Zeroual says.

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I was happy to see Sarah Lacy’s semi-scathing article about TechCrunch50, because I was beginning to wonder if I had reacted to the event too negatively.

For me, only a tiny handful of startups were even remotely exciting, and listening to the demos in the hot, stuffy conference room was more fatiguing than inspiring, or even educational.

Lacey writes: “I did interviews with most of the TechCrunch50 experts backstage and there was a common gripe about the companies launching there: Not enough passion, not enough swinging for the fences, not enough trying to change the world. There were too many people building safe businesses, too many companies just trying to make existing things slightly better, and too many people wanting to be the next Mint.com, not the next Google.”

To be fair, this year’s TC50 companies seemed a more diverse group than last year’s. (At first take, at least. Now looking back on last year’s list, I’m not so sure.)

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Live streaming from the TechCrunch50 2009 conference.

Online TV Shows by Ustream

Last year’s Techcrunch50 caused me to wonder if we’d hit the end of the Web 2 bubble. There was a bloated decadence to the event that reinforced all the negative stereotypes of so many valley startups.

Instead of innovation there were a host of companies who were adding nothing new, simply copying others’ ideas in the great cash-out game.

Yammer, which was closer in degree to Twitter than Kevin Bacon is to Will Smith, was named Best-in-Show. Really, after all the work up, after all the companies coming from all corners of the world, the award was ultimately in appreciation of tweets. A perhaps-politically-motivated appreciation of tweets.

A lot has happened in the last year. Banks crashed less than two months after TC50, with the stock market soon to follow. Good times were R.I.P.’ed in the valley, countless companies shut down and hundreds of thousands lost their jobs in the industry.

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While the Obama administration gets most of the attention for its Government 2.0 initiatives, most of the really interesting stuff is taking place at the local level.

San Francisco has launched an open data initiative, dataSF.org (beta), which puts city data in the hands of citizens.

“The new web site will provide a clearinghouse of structured, raw and machine-readable government data to the public in an easily downloadable format,” Newsom writes in a Techcrunch guest post.

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Facebook board member Marc Andreessen said in a Reuters interview that the social networking site is presently on track to make $500 million dollars in 2009.

The Netscape founder and Obama-campaign folk hero believes that Facebook will be making billions in yearly revenue within the next five years.

“If they pushed the throttle forward on monetization they would be doing more than a billion this year,” Andreessen said. “There’s every reason to expect in my view that the thing can be doing billions in revenue five years from now.”

While the Palo Alto-based company doesn’t disclose revenue, it says it expects 70-percent growth this year.

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There was a bit of a controversy over the weekend when Techcrunch posted a guest article about the failures of Internet.

“Why Advertising is Failing on the Internet,” by Eric Clemons, Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania, argues that “the internet is not replacing advertising but shattering it.”

“The problem is not the medium, the problem is the message,” writes Clemons.

The problem with Internet advertising is that traditional ad models, developed for other media, do not work. Clemons gives three reasons advertising is failing: consumers do not trust advertising, they do not want to view it, and they do not need it.

“The internet is about freedom, and I suspect that a truly free population will not be held captive and forced to watch ads,” the professor writes.

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Tech layoffs quickly hit 300,000 this month, after reaching 200,000 only a few weeks ago.

Layoffs are accelerating: according to Techcrunch’s Layoff Tracker, it took four months to reach 100,000, and only five weeks more to reach 200,000.

Three weeks later, the number was 300,000. At the rate job losses are accelerating, the next 100,000 cuts will come in two weeks or less. That’s astounding.

The recent layoffs were at Pioneer (10,000), Cisco (3,000), Panasonic (15,000), NEC (20,000), Electronic Arts (1100) and AOL (700). Pioneer’s layoffs represent one quarter of its workforce.

But some people are getting hired. ReadWriteWeb reports that in 2009 there have been 293 tech new hires in 2009, mostly in marketing, IT/software, and social media/publishing.

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Mobile payments have been possible for months: where monetary transactions can occur solely through the use of a cell phone. With such an obvious innovation, it is unfortunate that implementation has come upon several snags, the largest one being the prohibitive transaction fee.

Using social networks as carriers for their applications, developers create needs for virtual items. This should be familiar to Facebook users who have received gifts or participate in the popular app Mob Wars. In the latter example, players level up in a mafia hierarchy while exchanging real cash for in-game weapons.

Spanning the gap between applications and mobile carriers, companies like United Kingdom-based Mobillcash enable users to utilize mobile transactions with a simple interface that is much less keystroke-intensive - entering a mobile phone number, receiving a text response, and replying with a single letter. Instead of entering personal data and credit card or bank routing numbers, the charge is applied by the mobile carrier.

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