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Foursquare needs check-ins to build strong local search engine

Foursquare continues to try to write its next chapter as the importance of check-ins fades, with the company raising new funding to support efforts to build a stronger local search offering.

Last week, foursquare introduced an updated iOS app with a bigger emphasis on local search and location-based recommendations. While the update puts the focus more on providing recommendations than collecting badges, a direction foursquare has been moving in since last year, the move could jeopardize the company?s rich location data set.

?The one downside to this that no one seems to be talking about is that moving away from check-ins as the central feature will lessen the data on which it?s building these recommendation and local discovery features,? said Michael Boland, senior analyst and director of content at BIA/Kelsey, Chantilly, VA.

?They have over three billion check-ins to work with now, but we?re talking about data that needs to be constantly refreshed to stay relevant ? I only wonder if in a year or two years, if they have the same volume of check-in data to build the robust discovery engine that they continue to develop to date,? he said.

Local exploration
Foursquare made quite the splash when it came on the scene several years offering mobile users a way to check-in at merchant locations. Its strong position here was key in its partnership with leading brands such as American Express, JCPenney and ESPN.

However, in the period since, check-ins have been integrated into other apps, including Facebook via the Nearby feature and Yelp.

At the same time, the value of check-ins has come into question for mobile users.

The new iOS app is part of foursquare?s strategy to move its focus away from check-ins. It features a more prominent Explore section as well as a universal search bar for finding nearby businesses while the friends feed has been updated to include a list of recommendations, trending places and information based on other users that are nearby.

The iOS updated followed a similar revamp of the Android app that was introduced earlier.

Broader reach
Also last week, the company announced it had raised $41 million in a new round of funding led by Silver Lake Partners. The money will be used to support the move toward local search.

One of foursquare?s strengths is its reach, with 33 million registered users and integrations into 40,000 apps, providing a rich supply of location data.

However, the company has reportedly been struggling to make money, with search ads its main source of revenue.

Some of the money from the new funding will reportedly be used to help it offer ads to more local businesses by building up its sales force.

?Foursquare for the past couple years has been turning into more of a local discovery engine, rather than purely a check-in service with social and game mechanics,? Mr. Bolan said.

?This started with the explore tab, and continues to the radar feature and the past couple redesigns,? he said. ?The newest UI refresh will be no exception.

?This makes lots of sense as it has so much check in data on which to algorithmically suggest places and things that users might be interested in. This also broadens its appeal to more of a mainstream audience that might not have been attracted to the early check-in-centric feature set.?

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