Foursquare’s API Is A Pillar Of The Mobile App Ecosystem

Editor’s note: Jonathan Barouch is the founder and CEO of location-based startup Roamz, developer of social media business product Local Measure. Follow him on Twitter @jbarouch

Foursquare has become entrenched in the fabric of the local web, providing an API that delivers common good for developers. Any destabilization in Foursquare or its developer tools would fundamentally affect the stability of the mobile web.

Now I’m not suggesting that they are so important to the U.S. economy that Ben Bernanke and the Fed should step in to participate in Foursquare’s rumored Series D. However, I do think that Keith Rabois’ comment about Foursquare having a small user base firmly misses the point. Even among all the lovers and haters duking it out on Twitter, no one stopped to consider what the sheer size of Foursquare’s developer base means for the industry.

Dennis Crowley said at the Mobile World Congress that 40,000 developers use Foursquare location data via their API. Let’s examine the effect on Google, Apple, Twitter, Facebook, Instagram, Foodspotting and many other apps if Foursquare and its API were to no longer exist.

The App Ecosystem

Pick up your smartphone. Search through some of your favorite apps. Do you have Uber? Maybe Foodspotting? Surely you have Instagram. These apps, as well as a significant amount of the most popular apps in Apple’s App Store and Google Play, use Foursquare location data. For developers who have user actions or content tied to Foursquare venue IDs it would be difficult (if not impossible in some cases) to migrate their services off the Foursquare location database.

I would guess that by adding together the unique users of the popular apps that Foursquare powers, you would find that its data touches several hundred million users. Foursquare remaining healthy and maintaining an open API is critically important to Apple given the reliance on Foursquare of so many popular iOS apps.

And while Google has an excellent Places database of its own, it too has an interest in ensuring Foursquare’s longevity. Those same app developers that fill up Apple’s App Store charts are also pumping out apps on Google Play that rely on Foursquare data.

For the moment Facebook appears to be somewhat dependent on Foursquare’s success.

Foursquare Over Facebook Places

Almost a year after Facebook acquired Instagram, the photo-sharing app, with its more than 100 million active users, continues to use Foursquare location data rather than Facebook’s own Place API. This would seem to suggest that even Facebook values the location data generated by Foursquare’s 5 million daily check-ins.

For Instagram it would be a significant engineering effort to migrate off Foursquare’s data, given that there isn’t a global harmonized version of the two location data sets. (I have seen first-hand how tricky it is to algorithmically match places across the data sets.)

For the moment Facebook appears to be somewhat dependent on Foursquare’s success. Foursquare also generates a lot of its traffic via Facebook’s open graph and other timeline integrations so there seems to at least be mutual dependence on things not changing.

Twitter’s Tied

What seems to have been missed in Twitter’s Vine acquisition was that it was Twitter’s first app that allows users to geo-tag a social media post to a physical place. With Twitter’s own apps, the location feature simply adds a user’s longitude and latitude without reference to the place where it was tweeted. Given that Vine has now set the precedent allowing users to tag their content to a (Foursquare) location, Twitter also seems somewhat tied to Foursquare’s location data.

Location is a huge opportunity for Twitter, and Vine’s use of Foursquare’s API might be the first step for Twitter toward a future of having more granular location data attached to tweets.

These examples illustrate that Foursquare’s value is less about the size of its active user base and more related to the reach of its location database. Its API is fast becoming the de facto location layer of the mobile web and touches almost every user of location-based apps.

The problem for investors is that they don’t appear to have figured out how to monetize this enviable position. With so many companies dependent on Foursquare’s location data, a lot of people are hoping that they work it out — and fast.

[Illustration: Bryce Durbin]