Foursquare Talks Facebook Places, Google, and Acquisitions

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In its first six months, popular check-in service Foursquare grew from 200 users to about 1 million users--a milestone Twitter didn't reach for years. Now, the New York-based startup, which recently raised $20 million in venture capital funding, boasts more than 6.5 million users as it enters its second year.

Foursquare's growth continues to buzz past Twitter's during the same development stages, but the question is whether it will have that hockey stick-like growth spurt that made services like Facebook and Twitter ubiquitous.

"We're on that ramp now, but it's another struggle to get from 6 million users to 100 million," says Holger Luedorf, VP of mobile and partnerships at Foursquare.

Unlike other categories of social media that have clear, established market leaders--Facebook, Twitter--no startup in the geo-location space has yet to claim victory--and the check-in space is crowded. Besides Foursquare, there's Gowalla, Whrrl, Scvngr, Loopt, Yelp--the list goes on--not to mention the biggest threat to Foursquare (and every other location service for that matter), Facebook Places.

Many have wondered whether Foursquare could ever catch up to such a social networking monopoly as Facebook, which boasts nearly 600 million users to Foursquare's 6.5 million. Some have pushed Foursquare to partner with Facebook Places; others have suggested aligning with a larger company like Google to compete.

"How do we integrate more deeply with Google or Twitter or Facebook?" Luedorf asks. "It's always a question: Will that incorporation help them more than us, or vice versa? It's best obviously if it's equal, but that's what we're trying to figure out."

While Luedorf says his "gut feeling tells me we're in a really good position on our own," he recognizes that Facebook is indeed the "big guy in the industry," and that it's a possibility that Foursquare could get swallowed up by a larger company.

"I mean, we're so small that anybody can probably swallow us up tomorrow for the right price," he says.

When asked about possible acquisitions on the table, specifically from Google, Luedorf wouldn't go into too much detail.

"You know, everybody's talking--I know [Marissa Mayer] is a big fan--we have a good relationship with them," he says. (It's worth noting that Mayer, whose husband, Zack Bogue, helps runs startup incubator FoundersDen, seems to be getting into the investment game herself, making her first ever big investment as part a $23 million second round for upscale daily deal service One Kings Lane). "They have some interesting search capabilities," Luedorf says of Google. "Anything you can do around combining Foursquare and search is potentially very interesting right now. Again, we haven't really figured out the nuts and bolts, but it's one of the things we've talked about."

In the meantime, Foursquare is trying to grow on its own, and explain to users the value proposition of the service over its competitors, especially Facebook. This week at the Mobile World Congress, Foursquare announced it would be launching in several other languages, which should spur international growth. "The message to Europe is: This is our market too," Luedorf says.

Still, expanded language offerings might not do enough to lure users away from Facebook. When asked why a user would choose Foursquare over its 600 million-strong competitor, Luedorf begins ticking off all the benefits of Foursquare: built-in game dynamics, a curated social graph, streamlined check-ins, and so forth. Luedorf contends that Foursquare's advantage comes from being designed inherently as a location service.

"I think Facebook has done a great job emulating a little of what we have, but they can't really build in some of the things we've done," Luedorf says. "It feels a little empty when you first use Facebook Places."

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2 Comments

  • Miriam Dowd

    Perhaps Foursquare should work on European markets separately - for example, Tuenti in Spain, which was recently bought by Telefonica, has joined forces with PaginasAmarillias.es, and now has hundreds of thousands of businesses listed on it's Tuenti Sitios offering. Foursquare does not have the integration or knowledge of European countries to go it alone, partnering with Facebook-eque companies and lcoation/business services websites/networks could surely help them. More effort would be required for research but the ROI might be greater. http://four-point-oh.blogspot....

  • Kaliya Hamlin

    Better background on your story would help. FourSqure founders left google to start the company after they killed a Dodgeball a social check in service for the mobile phone that they aquired. They even started foursqure WITH parts of the code base they had at google.

    Fun good social things dying at google cause the engineering culture kills them is a bit disturbing (it happened to Wave for example) trend. I think this is a key factor in companies like Yelp and Groupon have chosen to turn down big offers from google. Twitter founder Evan has had experience with google too his company Blogger was acquired by them and never lived up to its potential as a social service.

    With this background why do the authors think that founders of foursquare go back to google? It is nice that Marrisa is a "fan" but she HAD those guys in her organization and obviously she and other executives were not fans back then.