Foursquare is cutting deals with major brands left and right. Everyday, it seems like there’s a new one. Like today, for example, they’ve announced a deal with Conde Nast. And here’s another one with Marc Jacobs. This follows a half dozen or so other ones with the likes of Bravo, HBO, Warner Brothers, Zagat, and others over just the past couple of weeks. But here’s the million dollar question, perhaps literally: is Foursquare making any money from these deals?
Though they won’t specifically go into the details of each deal, Foursquare is indeed making revenues off of some of them. “Some are paid, some are exploratory,” co-founder Dennis Crowley tells us. “We’re all about trying a little of everything and seeing what sticks,” he continues. When I pressed him if this means the still-small startup is already in the black, he laughed it off, “Ha, not yet. We’re hiring pretty quick, but it’s not totally unreasonable. There [are] so many deals on the table, it just seems foolish to punt on all of them,” he says.
Specifically, of the new deals, we hear that the Bravo one and the Zagat one are pulling in some money for Foursquare. Earlier, Lucky Magazine (a Conde Nast property) declined to comment as to whether their deal with Foursquare was for money as well, but don’t be surprised if that one is too. Again, none of this is enough to turn a profit, but it says something about the potential of Foursquare’s business model that less than a year after launch, they’re already making revenue.
At first, Foursquare said it wouldn’t focus on revenue and would instead focus on gaining users (they now have over 300,000). But that was still when the business deals were surrounding local bars and restaurants offering free food and drinks to users who became the “mayor” of their venue, or in some cases just checked-in. When the big brands came calling, so did the possibilities of earning money right away.
To that end, Foursquare is working on a set of services and tools, as AdAge reported earlier this month. It seems there will be three tiers of paid services: ones for small (local) businesses, ones for retail chains, and ones for big marketers. With these offerings, Foursquare would offer up analytics packages. “Then, deals could be sold against impressions such as web ads, clicks such as search ads, or a completely new model: cost per check-in,” Kunur Patel writes in the AdAge piece.
With the rate of Foursquare check-ins having doubled in the past month alone, you can probably expect even more revenue-generating deals to come in even faster.
Foursquare is a geographical location based social network that incorporates gaming elements. Users share their location with friends by “checking in” via a smartphone app or by text message. Points are awarded for checking in at various venues. Users can connect their Foursquare accounts to their Twitter and Facebook accounts, which can update when a check in is registered. By checking in a certain number of times, or in different locations, users can collect virtual badges. In addition, users...