Sorry Tiger, it’s the Year of the Location-based Services

February 3, 2010 § Leave a comment

2010 will be the year that location-based social networking services become mainstream. Bold statement? Hardly. With the rise in popularity of Foursquare, Gowalla, and other similar sites, we’re going to start seeing a shift in users from early adopters, to more mainstream adopters. I’ve been using Foursquare obsessively for a couple of months now, and it’s become increasingly hard to hold down mayorships. I didn’t think it would be a service that I could get addicted to – but every time I’m ousted as mayor, a piece of me dies a little. I don’t think it’s how many points I can rack up in a week, so much as it’s a combination of unlocking badges, and being mayor of various locations that keep me engaged with the app. It could also be that more of my friends use Foursquare than Gowalla, MyTown, Loopt, or BrightKite, thus giving me little incentive to use the other services. Despite Yelp having the edge in number of users, I really don’t think they’ll “oust” Foursquare as “mayor” of location-based services. I use Yelp to find new places to eat, thus, I have no reservations about adding random people I don’t know as I may find their reviews useful. With that said, I’m also unlikely to use Yelp’s check-in because, aside from the fact that there are no exciting game-mechanics to it, I really don’t want people on Yelp to know where I’m checking in. The type of people I’m connected to on Yelp, are very different from that on Foursquare.

With location-based services, monetization will be huge. I previously blogged about hyper-local targeted advertising, otherwise known as location-based advertising. Imagine the possibilities with location-based advertising within location-based services. If someone checks in to a location tagged as nightclub at 11pm on a Friday night, they can receive an advertisement right when they check in, on late-night pizza. This way, when they’re stumbling out of the nightclub with their friends at 2am trying to figure out where to satisfy their munchies, the idea of late night pizza is already in their head (or maybe they receive a push notification around 1:30am letting them know of a pizza place open late).

2010 will be the year location-based services become huge. More mobile phone users are getting smartphones, and the smartphone market penetration keeps increasing – though location-based apps are doable on normal phones, the user-experience is a lot better on a smartphone. On another note, it would be interesting to study how many of those with smartphones don’t have data plans, and why they don’t have them (or why they bothered to get a smartphone if they weren’t getting a data plan). So, while it is the Chinese Year of the Tiger, it’s definitely the tech year of the location-based services, whether or not that’s Foursquare, or Gowalla, or some other service, has yet to be seen.

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