Is Foursquare about to go ‘mainstream’ like Twitter before it? The Telegraph thinks so.
In terms of size, Foursquare is still just a baby. Its growth is impressive and it just surpassed 2m registered users, but in the overall scheme of things, that’s still a relatively small number. But soon, Foursquare and Twitter may share a potentially important business accomplishment: deals with major search engines.
According to The Telegraph, Foursquare is negotiating with Google, Microsoft and Yahoo! about search partnerships similar in nature to the ones Twitter previously signed with the same search engines. According to Foursquare founder Dennis Crowley, “Our data generates hugely interesting trends which would enrich search…We can anonymise data and use it to show venues which are trending at that
Being able to track tending locations has understandable appeal. Location-aware search is increasingly important, and ‘real-time‘ is too. If location-based services like Foursquare can help search engines determine ‘what’s happening‘ where and when, there are plenty of applications for search engines to experiment with. Someday, data from services like Twitter and Foursquare could be applied more broadly in the SERPs.
From this perspective, it’s smart for search engines to ink deals with companies like Twitter and Foursquare. But that doesn’t mean that they shouldn’t be cautious. Becoming too reliant on data supplied by third parties who charge for access to their data introduces some obvious business risk. And it means there will likely be some limits on how far search engines can go; after all, since they don’t own the source of the data, they have limited control over how it’s collected and delivered.
Case in point: when Google announced that it was buying ITA Software, it detailed why it didn’t just license ITA’s technology:
Why do you have to buy ITA Software, when you could just license their QPX service
from them like other websites do?
We think we can make more significant innovations and bigger breakthroughs in online flight
search by combining our engineering expertise with ITA Software’s than we would by simply
licensing ITA Software’s data service.
A similar argument could be made when it comes to data from companies like Twitter and Foursquare. If it’s as valuable as many believe it could be, licensing deals may not be enough. So should Google, Microsoft or Yahoo buy Foursquare (or Twitter)? According to some reports, Google and Yahoo have tried and either failed, or pulled back.
Which raises perhaps the most important point: if the data from services like Twitter and Foursquare proves to be as valuable as many believe it could be, one or more of the major search engines may have little choice but to try to make an acquisition offer that can’t be refused. If the data, however, proves to be less valuable, Foursquare and Twitter may find that these licensing deals were ill-conceived in the long run.
The bets are lined up. Who will win? Only time will tell, but Twitter and Foursquare investors are clearly confident about their odds, and if they’re right, it’s bad news for the search engines.