Foursquare has been busy expanding its location-based social network, recently hitting the 10-million-user mark, but its revenue-generating abilities haven’t grown quite as quickly. Now the New York city-based startup seems determined to change that picture, by offering “daily deals” through a number of partners. If Foursquare can manage to make this marriage of location and deals work — and if it can somehow bring deal giant Groupon into the fold, a partnership it is rumored to be working on — the company might be able to justify the high hopes of its backers. The only potential dark clouds on the horizon now are Google and Facebook.
In its blog post announcing the news, Foursquare notes that it has been expanding into the deal or discount-offer market over the past few months, including the launch of a “load to card” partnership with American Express that allows cardholders to get discounts without having to print out coupons. Foursquare does not make money off the American Express deal. But the new partnerships represent a much more substantial move in that area, since they include LivingSocial — the number two player in the daily deal space — as well as Gilt City, which is part of the giant European Gilt Groupe operation, and BuyWithMe (Zozi and AT&T Interactive are also involved).
In some ways, the launch of these daily-deal partnerships are the fulfillment of Foursquare’s long-held ambition to “go beyond the check-in.” As far back as last summer, founder and CEO Dennis Crowley admitted in a sit-down interview with Om that he knew the simple check-in had become — or was rapidly becoming — a commodity, and that Foursquare was making plans to add more value for its millions of users, in order to try and keep them coming back (and potentially generate some revenue).
What that value was going to consist of, apart from more badges and mayorships, wasn’t exactly clear at the time. But marrying daily deals from retailers to a user’s location or relationship with an advertiser seemed like an obvious addition to the network — and Foursquare started to expand into that market with the rollout of Specials, involving discount deals with specific retailers and locations. But the latest announcements are a huge step in that direction: Even LivingSocial alone, which is backed by online retail giant Amazon, could add a massive volume of location-based offers to Foursquare (although how much of the revenue Foursquare will keep from these partnerships is unknown).
A few big question marks remain, however: one is Groupon and the others are Google and Facebook. Groupon recently launched its own attempt at marrying daily discounts and location, a program called Groupon Now that provides offers to users of its mobile apps and website. But there have been reports that Foursquare is in talks with the deal-based giant — which is launching its initial public offering of stock soon, expected to give the company a market value as high as $30 billion. If Crowley can land Groupon as a partner (something rival Loopt has already managed to do), that could make Foursquare the market leader.
Meanwhile, Google is busy rolling out its own deal platform, called Google Offers. While the search company is obviously a gigantic competitive force with billions of dollars to spend, it has been trying for some time to make a dent in the location-based market, with Google Places and a variety of other experiments such as Google Hotpot (which has been rolled into Google Places). Its mobile offering, called Latitude, has been around for some time — and was a successor to Crowley’s previous company, Dodgeball, which Google acquired in 2005 — but has never really managed to get much traction.
Facebook has also experimented with deals through its Facebook Places platform, which was launched last year with the support of a number of players such as Yelp, and it has its own Groupon-style offering called Facebook Deals that began rolling out earlier this year as well. But it has not made a major effort to combine the two yet, although that possibility certainly exists. But will it try to do this on its own, or partner with someone like Foursquare — a company it once reportedly tried to acquire?
Whether Google Offers or Facebook Places/Deals can break the location-based market open and broaden it beyond early adopters remains to be seen. But even with the competition from these two major players, a Foursquare-Groupon combination (assuming it ever comes to pass) would still be pretty hard to beat. And landing that kind of deal might finally justify the $600-million market value implied by Foursquare’s latest round of financing.
Post and thumbnail photos courtesy of Flickr users Nan Palmero
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The new Foursquare app for Windows Phone makes use of some of the cool new features and API's available in the coming "Mango" update, and some of them are very useful. The one I like the best is the deep-linking feature. Say you're using Bing's local search, or Bing maps, or the Local Scout and you tap on a location to see more details. Swiping the screen to the left will show the "Apps" tab that lists a few apps that you can jump into and transfer some context sensitive information over. With the new Foursquare app, a Foursquare button shows up there and pressing it will jump straight into a Foursquare search for the location you had been previously looking at. From there you can tap the location and check in right away. You can also pop up the menu bar at the bottom and pin the location's Foursquare check-in card right to your Start screen. This is useful if you check into the same place frequently or if you just want a shortcut to someplace that you plan on checking into later that day. 
