Location-based services lure users, advertisers, investors

Jul 09, 2010 By Jon Swartz

If there were any lingering doubts about one of the hottest new technologies, a big investment and burgeoning membership numbers are proving that location-based services are about to go mainstream.

Last week, Foursquare raked in $20 million in venture funding. The ultrapopular Foursquare, which offers a free application that lets people flag where they are, whizzed past the 1 million-member mark in April and just passed 1.8 million.

Services including Gowalla, Loopt and Where are being embraced by mobile-device owners to shop, communicate, socialize and play games. Their total number of members runs in the millions.

Meantime, has aggressively pushed its mobile social network, Latitude, and Facebook is expected to unveil location features this year.

"None of us have 30 million users, but we're just at the beginning of breaking into the mainstream," says Sam Altman, CEO of Loopt, which has 3 million users.

Foursquare is the face of the fledgling industry. Earlier this year, it was rumored to be in serious acquisition talks with and Yahoo. But Foursquare officials decided it was too soon to sell.

Such services are part of a rising wave in , which is expected to soar in the U.S. to $3.1 billion in 2013, from $320 million in 2009, according to market researcher BIA/Kelsey.

Driving the growth are smartphone sales, which are expected to account for a majority of phones in the U.S. by the end of 2011, market researcher Nielsen says. About 5 percent of the more than 225,000 apps have location services.

Analysts say the appeal of location-based services goes far beyond game-playing and seeing where your friends are. "Location is such an important tool for local merchants and marketers to more deeply connect with customers," says Michael Boland, an analyst at BIA/Kelsey.

Since it began last year, Foursquare has established partnerships with more than 15,000 businesses, including Starbucks and CNN. It is adding up to 15,000 users a day. Loopt has signed advertisers such as Burger King and Gap. Where has deals with 20,000 small businesses in North America.

"It's not that these folks haven't advertised before," Where CEO Walt Doyle says. "They're just changing who they advertise with -- in this case, digital, instead of print."

The services will become more popular as consumers also share photos and content, says Josh Williams, CEO of Gowalla, which is up to 350,000 users.

Explore further: Retailers contort brick-and-mortar experience to fit phone-sized space

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Smartphones put the moves on social networking

Mar 14, 2010

Mobile social networking ruled on Saturday as the techno-hip at South By South West (SXSW) used location-based services on smartphones to track down everything from panels to parties.

Friends go online at Foursquare to meet offline

Nov 23, 2009

(AP) -- Laura Fitton's ascent has been staggering: In less than a year, she's become mayor of nine different places in several different states, all without giving any speeches or kissing any babies.

New social network is like Twitter with a twist

Mar 11, 2010

If you're just getting comfortable with Facebook and Twitter, you might want to brace yourself: Foursquare, the hottest among a rising new class of social networks, is gaining ground.

Loopt shows iPhone a new trick

Sep 11, 2009

Apple's iPhone has been a sensation from its launch -- even if, digitally speaking, it can't walk and chew gum at the same time. There are now more than 65,000 applications in the App Store, but the iPhone runs only one ...

Recommended for you

Chinese tech giant Alibaba set to make a splash with US IPO

4 minutes ago

The largest tech IPO of the year will come from a company that many Americans have never heard of. Alibaba Group - a Chinese e-commerce behemoth - has decided to go public in the U.S. after months of speculation that it would ...

Ex-Apple chief plans mobile phone for India

22 hours ago

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Apr 19, 2014

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

US venture investments highest since 2001 (Update)

Apr 18, 2014

Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report due out Friday.

User comments : 0

More news stories

Hackers of Oman news agency target Bouteflika

Hackers on Sunday targeted the website of Oman's official news agency, singling out and mocking Algeria's newly re-elected president Abdelaziz Bouteflika as a handicapped "dictator".

Making graphene in your kitchen

Graphene has been touted as a wonder material—the world's thinnest substance, but super-strong. Now scientists say it is so easy to make you could produce some in your kitchen.

Low tolerance for pain? The reason may be in your genes

Researchers may have identified key genes linked to why some people have a higher tolerance for pain than others, according to a study released today that will be presented at the American Academy of Neurology's 66th Annual ...

How to keep your fitness goals on track

(HealthDay)—The New Year's resolutions many made to get fit have stalled by now. And one expert thinks that's because many people set their goals too high.