Location, location, location – should we care where you are?

May 7, 2010 § Leave a comment

A few months ago, I first heard about a location service startup called FourSquare. At that time. LBS was one of my research topics at work and I read all about  FourSquare and Gowalla trying to convince the aGPS-enabled-smartphone toting Web 2.0 user to do. I dismissed it as a cool idea that had no practical value.

A few weeks ago, rumors had it that following a cool SXSW demo, Foursquare was being pursued by venture capitalists falling over their heels to want to fund the company while Yahoo was doling out a reported $100-$150 million to buy it. Meanwhile Gowalla was getting critical acclaim for its solution over the one offered by Foursquare.  I thought the sky was falling.

Now with the news that our newly minted Web behemoth Facebook, hooking up with McD (yup, you read that right – it is good old MickeyD) for a location signup service, things are getting very interesting. At this point, I am willing to concede that there is something about these location services that seems to hold enough promise worth $100 million or more. I am not yet willing to concede that it makes complete sense to me and am not sure what is the point in broadcasting to friends and the world where I am, when I am.

Much of this, like so many other mobile web 2.0 apps owes its success to the iPhone and subsequently the Android handsets, By making aGPS a necessary component rather than a luxury, they have spawned a new generation of location based applications post the Yelp! and Maps introductions.

I am not sure how companies will monetize the Location Services meaningfully. Bear in mind, we are not talking about the traditional Location Based Services (LBS) domain which is very valuable for targeted advertising. Location Services offered by FourSquare and Gowalla is not LBS, or atleast not yet. Much of the application is dependent on the “Pushing” of location info by the user to the database rather than a forced pull. So a lot of its success depends on how willing the regular smartphone user to check-in every time he or she is in a new location of interest. I could see it getting boring very soon if not to begin with. Add to this the very obvious privacy and security concerns of beaming where I am every time I want to, there are enough significant stumbling blocks to derail the location services startups at their infancy.

Proximity based advertising where a combination of your coordinates from GPS and other short range radio techniques like bluetooth or IR could potentially be combined with FourSquare/Gowalla like services to make things interesting. But it could as well be done without these applications with plain vanilla LBS. With indoor positioning evolving into a more robust technology, things will take a different direction. Another Valley startup Booyah has about 2 million users participating in a unique game that mixes real world locations with a virtual game titled MyTown.

If not anything else,  it will make for an interesting case study to see location services try to make it past its incubation phase into a value added service of some sort in the near future.

Update:

The only person left from the party just crashed it. Google announced an expansion to its Latitude platform which allows users to track friends who sign up for it, to now check-in. So get ready to know where every one of your friends are, even if you dont care. Maybe you should…

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