Industry Leader in Digital Business

Location Based Services: check-in the new social media hype

So you’re company is on Facebook, has a nice follower base on Twitter and is just starting to grasp the first possibilities of reputation management. But what’s next? This week’s post takes a closer look at Location Based Services (LBS) like Foursquare and Gowalla. These online platforms allow users to check in places with their GPS or WiFi enabled smartphones.

When you check in at a venue you can share your location on Facebook or Twitter, find local hotspots or special venue tips, and compete for location based badges. For some this game element is an irrelevant addition to the service while others travel as far as the northpole to check in. Location based services are growing and becoming a new hype in the Social Media bubble.

Foursquare recently announced it almost reached 1 million users. The hype is supported by special events like a Foursquare day as celebrated in Malaysia. Users are able to organize events and invite friends to get together at a certain location and even if they’re not there you can read their tips and tricks for the venue. And these ‘social’ options of these location based service applications allows them to connect with large retail and convenience stores like Starbucks to enhance the customer experience. They offer special check in awards for users and as a result the website allows the retailers to track their user behavior even more and provide them with special offers.

For now these services are only relevant in cities in which a lot of users are active and actually compete to become for example mayor of a venue, play the game to receive the most badges, and share their location with friends. What we see here is the important notion of the network effect, the more users, especially your friends in your network, that use the service the more relevant it becomes. And here we see a new struggle from recent startups to achieve a critical mass before they grow a large and stable user base. With Google’s Latitude and upcoming services like Loopt we see the same struggle we saw (or still see) with the social network websites.

Recent startups like brightkite and aggregating services like, which allows user to check-in on multiple services, are competing for new users. But what if the big players join the scene, both Facebook and Twitter are buzzing to introduce location based information and integrate this with their services. Facebook expects their new external like service to be able to reach 1 billion ‘likes’ in just 24 hours from their 400 million active users, so when they introduce location based services this will provide fierce competition. You would be able to walk into a Starbucks and instantly ‘like’ the venue on your Facebook network.

This however, doesn’t stop investors from funding new start-up companies without a clear business plan on how to make money. Are we entering a new bubble as discussed earlier on this blog or is Marck Zuckerberg right and is ‘Public the new Social Norm’? Is the internet becoming more open and social and are we willing to share our (private) information with this global network? It’s like heading back to the early days of the Internet in which virtual communities allowed anonymous individuals to connect and interact with each other. Recent rumors about Yahoo willing to buy Foursquare valued the website at 125 million dollar, which makes every user worth $1,25. So with the network effect in mind, they better decide soon…

Comments (2)

Social comments and analytics for this post…

This post was mentioned on Twitter by SYcommerce: RT @geertfaber Location Based Services: check-in the new social media hype: via @addthis…

We need a more secure world of internet and I am convinced that more innovations on spam protection will help this out. This is a very good article for learning.

Comments are closed.