Holy freaking crap… 😯
I am, indeed, in the wrong freaking business.
Video:
The Story via the WSJ:
Start-up Foursquare Labs Inc. has a large user base and a $600 million valuation, but unlike social-media stars Zynga Inc. and LinkedIn Corp., it has a big hole on the revenue line.
Now, the service, which lets users announce their location to friends by “checking in” at bars, restaurants and other venues via cellphone, hopes to ease its revenue problem with a series of pacts to remarket daily coupon deals from LivingSocial, Gilt Groupe and AT&T Inc. to its 10 million users.
New York-based Foursquare is in talks on a similar arrangement with Groupon Inc., people familiar with the matter said.
Foursquare will begin making the deals available Tuesday. Chief Executive Dennis Crowley said it will get revenue from the deals it sells for its partners, but declined to specify the breakdown.
The move is Foursquare’s most significant attempt yet to build a revenue stream. If it works, it could reduce the skepticism toward the start-up’s business model.
Despite its growing user base and brand, the three-year-old company hasn’t come up with a way of making much money from its service. Foursquare thinks its location-tracking capability and data, such as where a subscriber’s friends are checking in, will help it better target daily deals and produce a higher conversion rate for them in the increasingly crowded market.
Foursquare has checked into a new office in San Francisco, its first outside of New York. Co-founder Naveen Selvadurai talked with Stacey Delo about how the company isn’t concerned about revenue or valuations, but is concerned about privacy.
“We are trying to see if our targeting works and how users will react,” Mr. Crowley said in an interview in Foursquare’s New York office. “The deals haven’t been heavily targeted with some of these providers.”
Jake Maas, senior vice president of business development for LivingSocial, said the deal with Foursquare adds another distribution channel for his company, which already markets deals through websites and bloggers. “We’ll see where it goes, but we are optimistic,” he said.
AT&T has started its own location-based deals service, but AT&T Interactive CEO David Krantz said partnerships in which companies share deals and users will become more common as the market gets more competitive.
“Nobody reaches everyone,” said Mr. Krantz. “You will see a web of top players who have sales forces and brands working together.”
Foursquare also has struck agreements to market offers from group-deal site BuyWithMe and from Zozi, which offers deals on activities like golf lessons. Gilt City, the Gilt Groupe subsidiary that offers daily deals, will be offering the deals to Foursquare.
Would it be wrong of me to hate on a guy that stands to make that much coin; off something like that? Maybe just a little?
Nah, if he designed it and it took off; I am all for it. God Bless the man and hope he puts it to good use.
But 600 Million?!?!? Holy Moses. 😯