Will Foursquare check out now that Facebook has Places?

Five years ago, one of the last things an entrepreneur with a hot consumer internet startup wanted to hear was "Google is launching a new service just like yours." It's 2010, and that has changed to "Facebook is launching a new service just like yours."

But that's precisely what Dennis Crowley, the founder of the increasingly popular location-based service Foursquare, recently heard.

With Facebook Places, Facebook wants in the growing market for 'check-ins'. 'Checking in', of course, is an increasingly popular way for consumers to share information about themselves on the social web today. And it also happens to have some monetization potential to boot.

Given Foursquare's prominence in this space, it's not surprising that some have questioned if Facebook Places will be the death of Foursquare. There are two possibilities:

• Facebook will, for the average mainstream user, make it all but pointless to use standalone services like Foursquare, leaving these services to compete for niches within the broader market.
• Facebook will accelerate the mainstreaming of 'check-ins' and grow the market for the Foursquares of the world.

Which is most likely? That's anyone's guess. But if history is any indication, Foursquare, like Twitter, which also had to deal with competition from Facebook, will still be here next week. But the real question for Foursquare is what sort of changes it will have to make to compete effectively against Facebook's encroachment. When Twitter caught Facebook's attention, Twitter was far more popular than Foursquare is today. That means Foursquare may find it more difficult than Twitter to deal with Facebook.

For his part, Foursquare's Crowley doesn't seem too worried. He says that Facebook had to make Places "a little bit generic" given the massive audience Facebook has to please, and that Foursquare, which is popular but still much, much smaller, can afford to be fun:

Part of what you see on Foursquare, which is the game mechanics and the snarkiness and really more importantly like the fun and the playfulness that we build into the product, because I think that’s the stuff that most people relate to. And you can poo-poo how like those touchy-feely things don’t mean too much to users but I really think that’s the core and kind of the soul of the service and people identify with that.

There's some truth to this, but Crowley can't have it both ways. If Facebook has to be "generic" to appeal to a large number of people, Crowley would necessarily have to believe that Foursquare will need to ditch some of the game mechanics and "snarkiness" if it too wants to appeal to a broad audience. Certainly Foursquare's investors haven't poured lots of money into the company at a rich valuation believing that it would remain a service relegated to first adopters.

Which brings us back to Twitter. One of the reasons Twitter is still thriving despite Facebook's presence in its market is that Twitter's brand has always been flexible. Even today, Twitter is very much what you make of it. Foursquare, on the other hand, can't ditch game mechanics and snark without ditching the core of its brand. Whether that brand will continue to rise will depend a lot on what combination of utility and entertainment consumers are looking for when they check in.