The rumor mill has been churning ever since Facebook CEO, Mark Zuckerberg, flew to New York to visit Foursquare CEO Dennis Crowley, reports TechCrunch. The meeting hints at a potential acquisition of FourSquare by Facebook. As smartphone devices and geo-location adoption increases in popularity, Facebook needs to weigh-in and FourSquare could be the answer.
Growth in the location-based social network market will surely play into the next evolution of Facebook’s updates. In fact, the Business Insider notes Facebook has already confirmed a future “check-in” feature (terminology used by FourSquare) and McDonalds will soon offer a location-based Facebook app.
As we’ve seen with other market leaders, (i.e. Google’s many technology acquisitions) acquisitions can accelerate leadership in the market. Past Facebook acquisitions could indicate a potential FourSquare buy. Facebook acquired FriendFeed for $15 million partly to obtain its news feed technology. Additionally, FourSquare already has an established leadership position, advanced technology and strategic partnerships that Facebook could use to adapt to its 400 million-user strong social network:
FourSquare has an established leadership position
Although its counterparts, such as Gowalla, Loopt and Google Latitude are growing steadily, FourSquare is the rising star everyone has their eye on (potentially including Facebook’s CEO Mark Zuckerberg). It took Gowalla three years to gain 150,000 users whereas it took FourSquare one year to reach one million users (in-line with Facebook’s first year user growth rate).
The technology is already developed
Beyond the FourSquare location-based technology, it boasts other Facebook-esque features, including world-wide “check-ins” and a gaming element. In 2009, FourSquare “check ins” included 100 metro areas worldwide. In 2010, FourSquare enabled “check-ins” from any location. Users can earn badges — a feature similar to Facebook’s gifts — and receive pings when friends are nearby (maybe a good feature for old high school friends you’d rather not bump into).
Facebook could utilize FourSquare’s strategic partnerships
Already, FourSquare has partnerships with Bravo, Conde Nast and the New York Times that Facebook could use to its advantage. For instance, The New York Times partnered with FourSquare for the Vancouver Olympic Games. Users that visited NYT recommended Vancouver restaurants received a NYT badge. Facebook could expand NYT reviews nationally. Much like the Vancouver Olympics, users that visit the restaurants will earn NYT badges.
The deal is certainly favorable for Facebook, but what would sweeten the deal for FourSquare’s founder, CEO Dennis Crow? “A couple weeks ago, a VC who at one point wanted in on Foursquare told us he was sure Dennis would sell the company to Facebook because CEO Mark Zuckerberg is ‘someone he admires,’” writes The Business Insider. Indeed, the former FriendFeed leadership has comfy positions at Facebook.
Until Facebook officially announces the acquisition, the rumor mill will continue to churn. While a FourSquare / Facebook deal would be ideal for both companies, if a deal fell through, Facebook still needs to answer the location-based question. With growth that parallels the infant days of social media (i.e. one million users in one year), the potential for location-based integration (particularly, FourSquare) into Facebook would be a wise, natural next step for the social leader.