That girl on the Foursquare logo always looked a little worried, and now we know why: A bigfoot named Facebook just stomped into her territory to steal away her check-in game. At least that’s that way it looked yesterday when Facebook stepped decidedly into space previously dominated by the likes of Foursquare and Gowalla, as well as Groupon.
Facebook’s new Deals feature allows companies to make Groupon-like offers. And Facebook also gave apps the ability to share users’ check-in’s, indicating that the social network wants to become ground zero for location information. Facebook also made clear that the features it introduced yesterday–Single Sign-In, Deals, and the opening up of Location APIs (the pipes that enable the transfer of location information between apps)–are just the first step in a larger mobile strategy that includes location and social elements.
The threat that Groupon and Foursquare–and their peers in the social-mobile space–now face is part and parcel of the kind of cycle new industries typically pass through: A scrappy startup comes up with a breakthrough idea and launches a product around it. The product, if it succeeds, serves as a proof of concept: It demonstrates that the breakthrough idea wasn’t just some loopy fantasy of a fringe player but actually constitutes a real opportunity. A larger player, previously sitting on the sidelines, sees that success, picks up the idea, and runs with it. And, given its size, the larger player has the potential to steal market share from the smaller player, leaving them struggling for a footing in the field they created.
Of course being bigger isn’t always a slam dunk (Google has already introduced a places feature in its Maps). And being smaller isn’t necessarily a death sentence. During the dark days when files created on PCs weren’t compatible with files created on Macs, PCs had the advantage. There were just so many more of them. Many customers, particularly businesses, chose simply to use the same system everyone else had, rather than to constantly futz with converting files. And yet, a hardy contingent nevertheless continued to choose Macs. Convenience was less important for those customers. They went with Macs because they valued the other qualities Apple brought to the table.
Both Groupon and Foursquare think they still have enough going for them to compete in the location and offer spaces. Fast Company asked each for their reactions to Facebook’s news. Both sent back canned statements by email.
From Groupon: “The new Facebook location-based Deals coexist with Groupon’s services the way that Foursquare’s partnerships have. It’s a different product that serves a different need.”
