Location-aware applications like Foursquare have been a hot topic across the web, especially on this blog, and although Foursquare has passed over one million check-ins per day, location-aware apps are still considered early adopter technology. Now, with the introduction of Facebook Places, location-based check-ins stand on the brink of mainstream acceptance. With the world's largest social network, boasting over 500 million users worldwide, the most recent addition to the location arena, it stands to reason that a giant percentage of the social media population is about to be exposed to check-ins for the first time.
There are still limitations, though, that must be considered. First is the ever present paranoia (sorry for the brief outburst of personal bias) regarding security. Checkins = privacy concerns = security breaches, no matter how strong Facebook's privacy controls are. That will remove a large portion of the potential user base. Second, location-based check-ins must be executed through Facebook's mobile site, meaning only smartphone users can partake in the fun. Once again this cuts down the potential user base. Finally, only the iPhone's Facebook app currently supports Facebook places. All other smartphones will need to access places through Facebook's mobile site, not the native app. For most smartphone users, this will require a deviation from current behavior to access Facebook through their mobile browser rather than the app. This deviation may too shrink the number of potential users. However, out of the remaining set of users who do use the new service, what will the introduction of Facebook Places do to their relationship with other location-based applications like Foursquare? We imagine two strong possibilities.
Facebook & Foursquare Play Nice
The first outcome is that Facebook and Foursquare form a beautiful symbiotic relationship and fuel the growth of one another. This may sound like a pipe dream but it's actually possible. How? Facebook actually appears to be interested in this outcome. Facebook is opening its Places API (the background set of codes that allow check-ins) to third party developers so that a check-in on Foursquare would equally result in a check-in on Facebook. How this will actually play out though is still hypothetical as nothing has been released yet. There are three possible tiers: good, neutral and bad. The good outcome, for both Facebook and Foursquare, would be that the integration of the Facebook API to Foursquare's application increases the value of check-ins vs check-ins through Foursquare alone, resulting in either better deals and services for businesses, more rewards and badges, or a smoother, streamlined interface on the two apps. This would potentially encourage Facebook Places users to adopt Foursquare because of the inherent advantages. The neutral outcome is that nothing changes, for better or worse. Foursquare still works the same, Facebook Places works the same, but a check-in through Foursquare now results in a check-in on Facebook as well. This is still a win for both services, although not as enticing as the good outcome. The bad outcome is that the integration makes using either service tedious or cumbersome. This may mean the process has more steps, is slower, or results in excess spam or clutter on your wall. This seems like a less likely possibility because one would hope that neither service would rollout an update that would hinder the user experience; however, it wouldn't be the first time and so it remains a possibility nonetheless.
One caveat, regardless of which of the three tiers plays out, is that the Facebook Place API is an open API, meaning it's available for all location-based applications to use and integrate. Even if Foursquare creates a winning integration, Gowalla, Loopt, Whrrl or a dozen other apps could do the same thing. On the contrary, Foursquare may create a wining integration while competitors don't, or vice versa. The point is competition will still abound. The silver lining is that Facebook and other location-aware apps playing nice together has a high potential to promote an increase in overall check-ins and and location-aware app use.
Facebook & Foursquare Battle it Out
The second, and less favorable option, is that two brands decide to fly solo and attempt to win the location battle based on their own merits. Truthfully this will be a decision made entirely by Foursquare as Facebook has already committed to releasing its APIs. If Foursquare decides they don't need Facebook to succeed or that a partnership with the social networking powerhouse would not benefit their users, they may decide to put faith in having the superior product and trust that new users interested in location-based products will continue to seek them out on their own. This would be an extremely risky tactic, but one that would best preserve Foursquare's integrity as the leader in location-based check-ins. If Foursquare uses Facebook's API, it could be seen as relying on the industry giant to validate its own services, rather than as expanding its compatibilities to provide users with a more complete user experience. Not integrating Facebook's APIs, however, could look arrogant and would be extremely risky. Millions of users already use the Facebook mobile application everyday, meaning check-ins through the Facebook app would require minimal extra work. Expecting users to check-in through a separate app, something millions of users aslo already do, requires extra work that may result in check-in fatigue for a majority of users (a topic that you can look forward to in our follow up article).
As with the above caveat, the same situation applies here. Just because Foursquare decides not to implement the Facebook Places API doesn't mean that its competitors in the location-aware market won't. This fact alone makes flying solo extremely ill-advised for Foursquare.
Implications
Based on initial numbers released earlier this morning, it appears that the launch of Facebook Places has already lead to a surge in new Foursquare users. Whether or not these new signups will migrate to regular users is still unknown, but this is definitely a good step in that direction. Ultimately our prediction is that one of two things will occur as a result of this influx: either Facebook will win the location war and become the only dominant player in the field or Places and its open API will fuel the growth of all location-based apps, increasing what is already a sea of potential players. Either way, check-ins are here to stay and businesses need to be ready to act accordingly. Users are checking-in at their favorite locations and they are expecting to be rewarded for it. Business that jump on board now will become leaders in the industry and will be well rewarded for their efforts. But don't take our word for it, just ask Gap.
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