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Rumors of Foursquare's acquisition may be greatly exaggerated. Speaking in New York on Monday at Startup 2010, Foursquare founder Dennis Crowley was busy making the case for his company staying independent.

Will the company sell in the near future? It's unclear. But to hear Crowley tell it, Foursquare doesn't particularly need a large organization to keep it afloat. In fact, he seems to think Foursquare would be better off not selling.

Like Twitter before it, Foursquare is currently suffering from delivery issues due to its rapid growth. As Rebecca recently pointed out on Econsultancy, "its members' ability to take advantage of special offers, and indeed even to use the service, are being dangerously hindered by overloaded servers that prevent users from checking in to venues."

The site is getting about 600,000 check-ins per day. To keep up, rumors are flying that Foursquare will take a large cash infusion. Or more drastically — sell to a high bidder, like Facebook or Yahoo.

Crowley admits that his company doesn't have the luxury of having its network down for days, which is one growing pain that Twitter suffered at its inception.

Crowley was recently rumored to have met with Facebook founder Mark Zuckerberg, and an acquisition by Facebook makes sense in a lot of ways — especially considering the social network is on the verge of launching its location feature. But Crowley doesn't seem particularly interested in that. He says bullishly:

"Facebook didn’t kill Twitter, if anything it made them stronger."

After its failed Twitter acquisition attempts, Facebook expanded its entry into microblogging, allowing its users to make their status updates public. But that didn't kill Twitter. By a long shot. And Crowley seems confident that the ever-expanding market of digital check-ins will actually reassert Foursquare's dominance. There's one thing in particular that distinguishes Foursquare from the competition, according to Crowley:

"The magic of Foursquare is that it's hyper targeted."

And while larger companies may enter the space, Crowley doesn't think they'll crack Foursquare's secret sauce:

"We’re not going to be the only check-in service in town. Any location service on your phone will prolly have check-ins, but it’s what you do with that data."

Foursquare, focused solely on check-ins, has been hard at work analyzing and reworking its data:

"We have this trophy case, people are comparing themselves against each other.
It starts with a check-in, but we’ve got this whole army of products on top of that."

Crowley explained the reaction around the Foursquare office when one player in the local space launched a check-in feature:

"Oh my God! Yelp launched check-ins. Is that going to be disruptive to us?," they said. But in the end, the company isn't worried about Yelp's check-in product. Says Crowley: "I don’t know anyone who uses it."

A site like Facebook (or Crowley's former employer Google) has more leverage — and a higher change of getting check-ins right. But Crowley thinks Foursquare's benefit lies in specialization.

"We have the advantage that we started at check-ins. When a service starts with one thing and then starts offering other features, it can get confusing for users."

Even if it buys a company that specializes in the area? That seems to be Crowley's point. If a site like Facebook succeeded with check-ins, Crowley thinks it could confuse users, and dilute the product.

We'll have to wait and see if Crowley holds behind that stance with the impressive monetary offers that are currently rumored to be on the table.

But other small social media entities have avoided acquisition and lived to tell the tale. Twitter dominates micoblogging today, even though four years into its existence, Twitter is still a company in search of a business model.

Foursquare, on the other hand, already has relationships with businesses large and small. The company is hard at work growing those features. And if Foursquare get start monetizing in its infancy, that's another argument against selling. Says Crowley:

"We're building this rich layer of tools that local businesses can start to use to interact with people in a more sophisticated way. You know who your best customers are, you know who your best customers were."

Image: O'Reilly Conferences

Meghan Keane

Published 20 May, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Comments (1)


Ed Dearborn

Foursquare is the new FB for mobile. The world is going mobile. There is alot of buzz and I see major players, like David Meerman Scott, quite active on his. This is a sign of the times and why Yahoo wants it and wants to make it big.

Earning badges is evoking the boy scout dream of belonging and achievement.



over 6 years ago

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