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Foursquare, the latest social network on the block is back in the headlines this week. The British Telegraph reported yesterday (Monday 19th of July) that Foursquare is in talks with “everyone”, including the three major search engine giants Google, Yahoo and Microsoft regarding a data partnership.
The location based social networking site was founded by Dennis Crowley and Naveen Selvadurai in March 2009. Foursquare describes itself as “a mobile application that is a cross between a friend-finder, a social city-guide, and a game that rewards you for doing interesting things”. The platform is supported by iPhone, Blackberry and Android mobile devices and third party versions of the application are available for other smart phones. The main functionality of Foursquare allows users to become friends with one another (much like facebook), update your status, leave recommendations for friends and “check in”. Checking in is basically when you tell Foursquare where you are at any particular time. This can be as general as a city or as specific as a coffee shop. This is where Foursquare becomes really fun because if you check into the same place more than anybody else you become mayor of that place.
It is this feature (checking in) that has brought Foursquare into the mainstream and created a following that reached two million users last week only three months after it reached one million users. As I reported in my last post, many brands have been using Foursquare and its check in system to increase foot flow and boost sales by offering various discounts to consumers who check in. These brands often give substantially bigger prizes to the mayor of a particular outlet. Notable brands to do this include Starbucks, Ann Taylor and Oscar De La Renta.
Capitalising on the quick success of Foursquare one of its owners, Dennis Crowley spoke exclusively to the British Telegraph to clarify the rumours that surround these talks with the major players in the search field. Crowley was quoted as saying “Our data generates hugely interesting trends which would enrich search”. He went on say that “we can anonymise data (make data anonymous) and use it to show venues which are trending at that moment. Twitter helped the world and the search engines know what people are talking about. Foursquare would allow people to search for the types of place people are going to – and where is trending – not what”.
While there is no set time frame for a deal with any particular company Crowley reported that it was an exciting time for Foursquare and that the company was in negotiations with a lot of different “potential partners”. Mashable hints that the social network might strike a deal with Microsoft before any other search engine company due to the fact that Bing has a heavy interest in utilising third party data within its search results and already uses recommendations from Foursquare users on Bing maps.
Nine months ago Twitter struck a deal with Google and Microsoft which allowed these search engines to show the most relevant, trending tweets when users searched for particular words or phrases and now Foursquare want the same for locations.
Before this news broke I was not convinced that Foursquare had much of a future mainly because you needed a smart phone to reap the full benefit of the social network and to date it has made little to no impact on the Irish market. However it is taking off in America and recently helped Dominos Pizza increase its sales by 29% in UK according to Mashable. On top of this the company is valued at $95 million thanks to a cash investment of $20 million by venture capitalist company, Andreessen Horowitz. The venture capitalist is headed by Marc Andreessen who is co-founder of Ning and investor in Twitter and a Facebook board member. Then there is Ben Horowitz who is a former Vice president at Hewlett Packard. So for the moment anyway Foursquare looks pretty safe to me.
