Markets

Foursquare's "Think Locally" Strategy Stands Out

By Catharine Taylor

Updated on: March 10, 2010 / 4:17 PM EST / MoneyWatch

With all of the new media-oriented tech companies starting up, it's difficult to figure out which ones you need to pay attention to from the dozens you don't. So BNET will do it for you.

With that, today's focus is Foursquare, a New York location-based social service, which officially launched a year ago. It has 475,000 members (some of whose updates are featured above), but soon it is likely to be much bigger, and more important, than that.

Foursquare mixes letting members tell people where they are with gaming. Users "check in" when they are at a location--say, the steps of an art museum--and the service tells their Foursquare friends where they are. It also recommends nearby locations, and keeps a history of the places users frequent. Individual Foursquare members can share these with their friends.

The game component is worked into Foursquare in the form of points and badges. Different check-ins accrue points; these points unlock badges, such as ones that reward the user for, as one example, discovering new places. Many media deals the company has signed so far (see below) play off this component of Foursquare. A promotion with Spin magazine at the fortcoming SXSW conference in Austin, gives users free tickets to an annual SXSW Spin musical showcase. They win these by checking in at shows by four Spin-recommended bands that are playing at the confab.

And then there's mayorship -- something that many Foursquare users crow about when they earn the title. Whoever checks in from a certain location the most becomes that place's "mayor." Beyond bragging rights, mayorship (check out the mayorship offer from Bowery Wine Bar, above) can confer all manner of freebies. It's an ingenious way of stimulating Foursquare usage and potential revenue from advertisers.

Here are four reasons why Foursquare should be on your radar screen:

It is a window into local social, an evolution of social networking that takes into account not only what you're doing, but where. Internet companies from Google to Twitter to Facebook are adding geo-location to their businesses. Twitter switched on the geo-location tool on Twitter.com this morning; Facebook will likely launch it to its 400-million strong user base next month.
The boom in smartphones, most of them with GPS capabilities, is a key part of the trend. According to comScore, smartphone penetration increased to 17 percent in 2009, from 11 percent the year before. Social media and smartphones are made for each other since the act of sharing often involves sharing where you are. According to recent comScore data, use of Facebook through mobile browsers has risen 112 percent compared to a year ago; Twitter use via mobile device leaped 347 percent.
Foursquare has been doing a lot of deals with media companies, including The New York Times, Conde Nast, Bravo and Spin magazine.
It has ways to make money, since the opportunities in targeting people at the right time, in the right place, are obvious. The company is working with a number of companies which use it as a promotional outlet and pay Foursquare to do so, offering loyal customers perks via the Foursquare platform, and so forth. While many local mom-and-pop advertisers are notorious for being technology laggards, geo-location is going to be huge for bigger retailers.

You may be wondering why people would run around obsessively telling other people where they are, and you're not alone. The whole concept has been ridiculed by pleaserobme.com, which aggregates tweets of people who are happily sharing the fact that no one's minding the house. But when evaluating new businesses like Foursquare, it's important to think of them not in the context of whether you would use them, but whether people you are trying to reach are.