Foursquare Searches for Revenue Streams
Foursquare, the location-based mobile platform that lets users collect special deals at registered locations when they “check in” via a smartphone app or SMS, reportedly plans to start charging its 500,000 registered merchants for premium services, including a dashboard, that it now offers free.
Included in these services are detailed user location histories and tools that help merchants obtain, engage, and retain customers and track their behavior. It is still unclear when Foursquare would start charging the merchants or what those fees would be, but published reports indicate that such a move is definitely on the New York–based company’s road map.
In addition to checking in and collecting deals, Foursquare’s more than 10 million users worldwide employ the site to share their locations with friends, collect points and virtual badges, bookmark information about venues they would like to visit, and retrieve relevant suggestions about nearby venues. The Foursquare site logs about 3 million check-ins per day and has amassed more than 750 million check-ins at more than 15 million locations since its founding in 2007.
Foursquare reportedly has a healthy valuation of about $600 million, but very little of that is revenue. Most of its present revenue is expected to come from limited advertising on its site and an agreement it recently signed with Groupon, under which Groupon’s daily deals would appear on the Foursquare site. Foursquare had arrangements in place with similar sites, such as LivingSocial, Gilt City, zozi, BuyWithMe, and AT&T, but none of those is expected to generate a lot of revenue for the company.
But, while charging merchants for customer data will provide the company with a solid income source, the company might have a hard sell trying to persuade merchants to buy data that they have been receiving free.
News Editor Leonard Klie can be reached at email@example.com.