Facebook Places Will Crush Foursquare

One of the odd aspects of the Facebook event launching the new Facebook Places service was the participation, support, and partnership of competing location-based check-in services. There may be some opportunity for a symbiotic relationship with Foursquare, but more likely Facebook Places will make services like it obsolete and crush Foursquare into a fine dust unless it implements an aggressive strategy to stay relevant.

A blog post by Alex Wilhelm at thenextweb.com describes why the author is abandoning Foursquare in favor of the new Facebook service. "Think of it like this: you can use Facebook to check-in and never touch Foursquare, Gowalla, MyTown, or Yelp, which means that a lot of people will not access these services. Most people will likely start using Facebook Places and never even hear about Foursquare," adding ''The hardcore fans of each of those companies will continue to use the first-party clients to check into Facebook with the Places API, but they will comprise a small portion of the overall user base."

The problem for innovative start-ups like Foursquare is that, ultimately, they are just real-world pilot tests for what works. Once a new social concept catches on, though, the Facebooks and Google's of the world will step in and monopolize it like big box stores driving mom & pop shops out of business.

As Wilhelm explains, Facebook is where most people live when it comes to social networking. People are invested in Facebook. They have already built an extensive network of friends and family. Nobody wants to join and manage multiple services and build separate social networks if Facebook is capable of providing the same functionality all from a single platform.

Still, Foursquare has managed to gain a significant following in its short lifespan, and it has made progress in building relationships with businesses. The alliance with Starbucks coffee is an example of working with a major global retail chain to utilize Foursquare location-based check-in as a focal point for promotions and driving repeat visits by customers.

In order for Foursquare to remain relevant and continue to grow, it needs to be aggressive in pursuing similar relationships with other chains, and building a base of businesses that connect the use of Foursquare with customer incentives and discounts.

The sad reality--at least for Foursquare--is that even if it does expand it will still likely fade into oblivion sooner rather than later. Facebook has established itself as the dominant social networking platform, and it has significantly more resources and leverage to make such deals and partner with retail chains.

The combination of Facebook's sheer size, and the fact that the customers businesses want to reach are already engaged with the social networking site mean that it will take a rival the size of Google to really compete head-to-head with Facebook Places.

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