Foursquare Clutches Its Crown as Location-Based Realm Evolves

7/18/11Follow @jpruth

Like mechanics building different cars around the same powertrain, makers of many location-based apps work with the platform provided by New York’s Foursquare. Some developers have meshed the check-in system with social connections, while others help movie fans discover the locations where their favorite scenes were shot, among other applications.

In spite of its innovations, however, the buzz surrounding two-year-old Foursquare may have died down somewhat. Other types of technology debuting on the scene such as the social network Google+ and music sharing platform Spotify may be attracting media attention for the moment. But Foursquare seems entrenched enough to control its own future which continues to unfold in the location-based services domain.

Foursquare, which had some 10 million users as of last month, still faces competition from larger players. For example, Facebook Places and mobile app Google Latitude also let users share their locations with others in their networks. Such rival offerings have not dissuaded investor support for Foursquare, however.

In June the company landed $50 million in new funding to help it expand its ranks. The round was led by Andreessen Horowitz and also included investors O’Reilly AlphaTech Ventures, Union Square Ventures, and Spark Capital. Foursquare says some of the funds will go toward hiring more engineers. A representative from Foursquare was not immediately available for further comment.

One industry watcher says he believes Foursquare is here to stay as the location-based market evolves. “They’re still the most popular check-in app,” says Michael Schneider, senior vice president of digital incubator at Allen & Gerritsen, an advertising agency in Watertown, MA. Schneider, who goes by the blog and Twitter handle SchneiderMike, is a digital and mobile technology strategy analyst who previously built data warehouses for Fortune 500 companies.

Schneider says he expects that the latest features from Foursquare, such as new tools to be used by merchants, will increase the technology’s integration with third parties. Foursquare says as of July some 10,000 developers were building software on its application programming interface, which is free to use. For example, New York startup Sonar uses Foursquare’s platform to help its users discover new social contacts in their proximity. Fellow startup Addieu uses Foursquare check-ins in its app to create a history of where and when users met their social contacts. “The development community is really mature for a startup,” Schneider says. “It is really easy for people to build applications with Foursquare.”

What’s more, Schneider says, location-based marketing platforms such as MomentFeed and Geotoko can benefit from tools for creating custom analytics through Foursquare. “They are going to have a lot more specific things for building measurement platforms,” he says.

Foursquare has also embraced the daily deals market. The company announced on July 12 new partnerships with daily deal providers LivingSocial, BuyWithMe, Gilt City, AT&T Interactive, and Zozi. The partnerships mean Foursquare users can search for daily deals available from sources near them.

In addition to the deal providers, some 500,000 merchants already use Foursquare, which allows them to offer rewards to their loyal customers who check-in frequently. “American Express Smart Deals platform is a good example of integration with Foursquare,” Schneider says. When users check-in at a merchant offering an applicable deal, they can apply the discount to purchases made with their American Express card, he says.

Other types of businesses are using Foursquare to give geographic relevance to their content. Oren Nauman, CEO of Israel’s AnyClip, says his company uses Foursquare’s platform to pinpoint where movie scenes were shot.

AnyClip lets users search for specific scenes from the movies indexed in its database. “Any location where the movie takes place, we know it,” Nauman says. AnyClip obtains information from the movie studios about the locations and integrates it with Foursquare to show users how to find the same spots. “We wanted to connect a virtual location to a physical location,” he says.

Helping users find such places, he says, could also help promote the businesses in the vicinity of the shoot. “What if you could find a vacation resort where the Pirates of the Caribbean movies took place?” Nauman asks.

So puppy love over shiny new technology may have pulled some of the attention away from Foursquare, but Schneider is unfazed. “Spotify has taken some of the focus off of them,” he says. “I don’t understand why [Spotify] is getting all the press when Rdio has been doing the same thing for several months. I’m not worried about Foursquare.”

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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