ADOTAS – A source of confusion surrounding the launch of Facebook’s expansion of its Deals product to the group-buying revolved around the pricing — some initial news reports suggested that Facebook was offering the new discount service free to merchants, which would severely undercut Groupon’s 50% commission fee.
Alas, local merchants, you knew that had to be too good to be true. A business will have to pay to set up a Facebook deal, but Check-In Deals through the location-based Places feature will now be free for merchants to set up.
That must make the higher-ups at Foursquare gulp — check-in couponing is about the company’s only revenue stream (well, do you count venture capital?). Add to that gloomy forecast Groupon’s acquisition of Pelago, which ran location-based mobile social network Whrrl. That move certainly suggests Groupon is developing a personalized discount recommendation system and possibly some kind of check-in discount service.
Once extremely hot and crowded, the location-based mobile social network space is not only thinning out — goodbyes from Whirrl, Buzzd and Brightkite so far this year — it seems to be cooling as group-buying sears with hype. Foursquare is still top dog in the mobile check-in space, a role it cemented during South by Southwest when it introduced version 3.0 of its app and a new merchant platform.
Around that time last month, cofounder and CEO Dennis Crowley boasted to The Telegraph that Foursquare’s user base has doubled since Places was launched last August — it now stands at close to 8.5 million with 230,000-odd signups daily. It’s difficult to find any user activity data about Places — while a lot of Facebook users have signed up, word on the net is that they are not nearly as engaged as Foursquare users. How many of your Facebook friends still share all their Foursquare posts in their Facebook news feeds?
As someone who deleted Foursquare from his iPhone, I find it hard to believe that participating in the check-in space is about more than finding discounts. The only time I logged into Facebook Places was to get a deal at H&M. But people really enjoy the Foursquare experience, much more than Places.
Toss me in with the people who simply don’t get the thrill of Foursquare (why do I want to check in again?). However, I can recognize the value for local advertisers in reaching out — through check-in discounts — to a highly engaged user base. That would be worth paying for versus Facebook’s free service.