August 25th, 2010It’s Still Too Early to Value Location Services, Businesses Say
by Emily Glazer
Are location-based services going to be the next social-networking step for businesses?
The big debate lately has been whether Facebook’s new location-sharing service, Places, will overwhelm pioneers like Foursquare. But the real question for the market may be how much businesses are willing to pay to use the services to connect with customers.
Foursquare, which has a real-time stats program and partnerships with national companies, might offer the best clues about how businesses could use location-based social networking. But it’s still too early to put a value on that, said companies that are testing such services.
Dozens of national chains are using data from Foursquare, which gives them tools to see stats about their location, like who checks in and where customers go before and after visiting.
For now Foursquare is free for businesses. But that won’t always be the case. “The goal is to get as many merchants on the platform as possible, understand what they want and some day charge them for what they want,” said Tristan Walker, Foursquare’s director of business development.
Will business continue to use the service? Several other pieces have to fall into place for the services to become more mainstream, said Sree Sreenivasan, a digital media professor at Columbia University. “You need customers who buy into the technology and are willing to use it, and you need businesses that are savvy enough to use it in a smart way to harness that,” he said.