“Location-based mobile social networking revenues will reach $3.3 billion by 2013, but successful business models may differ from what many observers expect,” said ABI Research principal analyst Dominique Bonte. “While location-based advertising integrated with sophisticated algorithms holds a lot of promise, the current reality rather points to licensing and revenue-sharing models as the way forward for social networking start-ups to grow their customer base and reach profitability. Recent evidence: the agreements between GyPSii and both Garmin and Samsung. Similarly, Loopt has established partnerships with all major US cellular carriers.”

Services like GyPSii, Pelago and Loopt allow users to share info via geo-tagged multimedia content. But several factors are hindering mass market apotion though: privacy issues, primarily. And small players are struggling to be heard in such a fragmented market.

ABI Research is a market research firm focused on the impact of emerging technologies on global consumer and business markets.