Location-based social networks: Where are you? A tale of fake mayors and real deals

Marketing, its veterans like to say, is all about the “three Rs”: reaching the right person in the right place at the right time. Hence the growing interest in marketing circles for mobile-phone-based social networks such as Foursquare and Gowalla that let users “check in” to shops or restaurants and instantly tell their friends where they are. Fans of such services gush that they will mint money by allowing ads to be targeted at folk who are about to make a purchase. But the networks must negotiate some important hurdles first if such lofty predictions are to come true.Location-based networking won an important convert recently in the shape of Facebook. For some time, the 800-pound gorilla of social networking had tracked the progress of firms such as Foursquare, which boasts some 3m members. Now it has entered the market with its own service, dubbed “Places”, which is currently available only to American users of its mobile application. Places lets them signal where they are to their friends on the network, in much the same way that they can “tag” themselves in photos.
http://www.economist.com/businessfinance/displaystory.cfm?story_id=16892050

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