Just when Betabeat goes and starts ragging on Foursquare for not being aggressive enough about generating some real revenue, BAM, they announce a partnership with some of the biggest names in the daily deal and flash sale world. According to Spencer Ante at the Wall Street Journal, Foursquare will remarket bargins from these services, using its intimate knowledge of the shopping habits and current location of over 10 million users to target customers who might engage with these deals.
“”We are trying to see if our targeting works and how users will react,” Mr. Crowley told the WSJ. “The deals haven’t been heavily targeted with some of these providers.” For outlets like LivingSocial, Foursquare makes a lot of sense as a new form of distribution. Any unsold deal targeting a specific restaurant, spa or clothing boutique can be targeted directly to users who check in to that venue, or just offered up as an ad alongside listed places if the Foursquare user is nearby.
The deal will allow Foursquare, which has been expanding rapidly, to avoid spending too much on its own sales force and throw its fresh $50 million in funding towards hiring engineers and biz dev types.
Another intriguing option for Foursquare is the so-called ‘API economy,’ which treats data as a service to be leveraged or sold. As Foursquare’s platform evangelist Akshay Patil wrote last week, the company’s API is now being used by over 10,000 developers and provides the location layer for some big name apps like Foodspotting, Venmo, and most importantly Instagram. Patil says that Foursquare doesn’t charge for its API yet, but its not hard to envision a future in which another revenue stream comes from apps like Instagram that sends millions and soon possibly tens of millions of requests each day.
For now, it seems, Foursquare is content to focus on growing the very best location-based social network, aiming to become the default geo-layer for mobile apps, and basically tap the business models of other companies in order to start generating revenue.