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Microsoft's Foursquare deal makes sense but scale still an issue

foursquare

The Foursquare app for Windows 8

Microsoft’s deal with Foursquare does not push location services forward significantly, but it does point to how such offerings are increasingly table stakes in the mobile space.

For Microsoft, whose mobile strategy is still looking for traction, the deal should help it enhance the mobile user experience. However, Google and even Apple, through a relationship with Yelp, are ahead in the game.

“Up until now, marketers have had to rely on consumers being aware of Foursquare, downloading it and using it in order to benefit from the data about their behaviors," said Eric Bader, chief marketing officer of RadiumOne, San Francisco.

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“By integrating Foursquare into the mobile operating system and more deeply into Bing, Microsoft can potentially eliminate the added steps that an independent app requires,” he said.

“Now, hopefully, mobile social behavior, search and Foursquare will all be interwoven so consumers can use more activities with Foursquare functionality in them and more activities produce more valuable data for marketers.”

Contextually aware experiences
This week, Foursquare announced Microsoft will be licensing its places database for use in Microsoft products and services.

As a result, when consumers use Microsoft devices powered by Windows or Windows Phone to conduct searches on Bing, places will be enhanced by Foursquare to provide contextually aware experiences and recommendations.

Microsoft has also invested $15 million in Foursquare, which was once the darling of mobile location services, but has struggled to maintain its relevance as competition has grown.

Yelp surges
While the deal points to how critical location services are, Microsoft and Foursquare both face a struggle getting consumers to gravitate toward them when in need of location-based information.

For example, local ratings and reviews service Yelp released its fourth quarter results this week, which highlighted how quickly the company is growing.

Yelp reported that the total number of advertisers grew 69 percent for a total of 67,000 while the number of monthly active users was up 39 percent for a total of 120 million, of which 53 million are on mobile. The company also saw revenue jump 70 percent in the quarter.


The Foursquare app

Personalizing search 

Microsoft will reportedly be leveraging Foursquare’s location targeting system to help it reach mobile users based on their location and points of interest. Microsoft could also take advantage of Foursquare’s push notifications technology to provide users contextually relevant information.

The idea will be to help Microsoft provide a more personalized search experience.

Foursquare last year launched apps for Windows tablets and phones that play to the unique interface of Windows.

The Windows version of Foursquare’s app uses the Metro interface, live tiles and global search. The tablet app is meant to let consumers spend more time browsing as opposed to the basic check-in (see story).

As Foursquare moves beyond the basic check-in, attracting advertising and enhancing its search offerings have been a focus. The deal with Microsoft could help it on both fronts.

“Data has become possibly the most important asset that Foursquare has because every check-in, every event’ that a Foursquare user engages in produces data that's valuable to publishers and advertisers,” Mr. Bader said.

“Microsoft does not have the most-used mobile products or search engine, which means that the uphill battle for attracting advertisers continues for them, but they get popular functionality and great data,” he said. “For Foursquare, they get more distribution and a bigger scope of audience.

“It's a good win for both, but together they still need more scale.”

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Software and technology, Microsoft, Foursquare, Yelp, location based services, geo targeting, RadiumOne, Eric Bader, mobile marketing, mobile

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