For as far back as we've been discussing social networks, there have been question marks around the best ways to monetize users. To date, advertising has been the primary strategy, with virtual goods starting to pull in some serious revenues.
But the challenge with advertising is that users tend to ignore ads that are not highly targeted. Even precisely targeted ads are largely ignored, which is why you see more and more of them taking up screen real estate. This has also led to more sites adopting a "freemium" content model.
And targeting is even more of a challenge when users are mobile, but mobility also introduces a whole new way to interact with and monetize users.
One of the more interesting companies in the location-based services (LBS) space is Foursquare. Surely, you've seen some message in your Twitter stream telling you that your friend is at some location or is the mayor of whatever, or has unlocked a badge.
And while Foursquare has nowhere near the user base of Facebook or Twitter, the users are very valuable as they promote the places they go and things they do simply by mentioning them in their communication stream.
According to The New York Times, Foursquare plans to distribute a new analytics tool and dashboard in the coming weeks that will give business owners access to a range of information and statistics about visitors to their establishments. This means that businesses can more effectively target users with specific offers and ads.
But what it really provides is a way for Foursquare and other location-aware services to make money.
Going back to 2001, I remember talking about location-based services while working at OmniSky, a way-too-early provider of hardware and software that turned handheld devices like the Palm V into mobile devices. We even acquired an Israeli company called NomadIQ to deliver location-based content.
Ten years later we're just starting to see location-based offers roll out in the U.S.--better late than never?
Many of the early international LBS were very basic social networks (primarily dating) and the demand for such services in the U.S. simply wasn't there, partially because of social mores and also partially because mobile devices have evolved fairly dramatically. … Read more
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