Foursquare: brilliant, but will it last for much longer?

In simple terms, Foursquare is a social network which enables its user to share their location with friends. The fun starts when the user subscribes to Foursquare, giving his phone number. After that, in a matter of few clicks in their smartphones, users let people know where they are, what are their impressions and/ or recommendations about the places that they happened to be. Users can also synchronize their Foursquare accounts to their Twitter and Facebook accounts, which can update when a check in is made. Whenever the users check in places, they receive points. By checking in a certain number of times in a given place, users can get some prerogatives.

In this sense, users who have checked in the most times at a given place will become “Mayor”. They will lose this status whenever someone surpasses their number of check in. A Mayor means, getting special offers or discounts depending on the businesses. So, Mayors eventually can get free drinks at pubs, special menus in their favorite restaurants, discounts in stores or complementary stay in hotels etc.
With almost one year of life, Foursquare has reached one million users. This social network has been growing in an astonishing rate. To get a flavor of it, Foursquare signed up some 120,000 new users in just 10 days and during peak times there are roughly 400,000 check-ins a day. The numbers review that not all users are using it on a daily basis.



Big brands started to look at the Foursquare. Bonin Bough, PepsiCo’s Global director of digital media believe that “from a broad strategy point of view, there's a huge potential with the ability to connect people to promotional experiences. We know where people are and can talk to them from a geo-located perspective -- that's a huge opportunity."

Dennis Crowley and Naveen Selvadurai, the founders of Foursquare are planning paid services for three types of business: small, private owned shops and multinational marketers. They could also leverage from Google’s search ads business model of cost per click. However, this fresh social network shall prove that it has a consistent capability of growth and retention of users.

A major threaten to Foursquare business model is that more mature and greater social networks could incorporate new features into their existing ones. For instance, Facebook, whose number of users are around 400 million worldwide, is developing a new feature by with users can make a new kind of status update on their profiles: besides the classic notes of thoughts, news, they will also be able to display their geographic location in real time to their contacts. In my view, the only chance to Foursquare won’t be swallowed by Facebook is to differentiate itself from whatever Facebook may come up with in the short term. Curiously, one of the founders of Foursquare, Dennis Crowley was the co-creator of the site Dodgeball, which was bought by Google in 2005 and which today is known as Google Latitude.

http://www.businessinsider.com/foursquare-plots-its-business-model-2010-2
http://www.businessinsider.com/foursquare-gets-its-local-ad-business-model-on-the-road-2010-4
http://bits.blogs.nytimes.com/2010/03/09/facebook-will-allow-users-to-share-location/