Why Facebook Should Acquire Foursquare

If Twitter was hard to explain to regular people Foursquare is a true enigma. While the digerati find it super cool to know the exact location of any friend, at any moment in time, there is a much larger swath of people who find the concept extremely creepy, and claim they wouldn’t be caught dead sharing that kind of “private” information. Even after you can get people over the privacy concerns, their next question is “Why do it at all?”. Foursquare and competitors like Brightkite (more of their own social network) and Gowalla (more game, than pure utility) are currently fighting the eternal social app dilemma; they become valuable only when your friends are also using it. Their isolated value is quite low. Facebook can solve the privacy concerns as well as provide instant availability of your friends, the chicken to Foursquare’s egg.

People trust Facebook and they operate with the view that only their real friends can see their information. Facebook, better than most recent consumer web companies, have assuaged peoples fears of sharing highly personal and private information. Facebook can solve the privacy concerns which otherwise greatly retard mass consumer adoption of a service like Foursquare. Facebook also solves the “friends” problem, they have the best and most up to date picture of people’s friends and their relationships than any web service. This connectedness is essential for Foursquare to provide value to regular users. Foursquare has implemented features such as ‘Mayors’ and ‘Badges’ to boost their “solo” value, but I would not use Foursquare if I were not able to get a core group of my friends to join. Facebook acquiring Foursquare instantly solves this problem. My friends would be there.

Foursquare gets a lot of value from being plugged into Facebook, but what does Facebook get? Simply stated, Facebook wants people to share more of their lives on the web. Facebook started their march towards this goal with basic information such as age, sex, phone number, high school, college, and other personally identifying information. Once users were comfortable with this, they moved on to photos, providing more value then ever before to sharing your photos online… seeing who was actually in the photos. Then came video sharing, and most recently a big push for status’. User’s physical location and they places they frequent would be a logical next step of new information to share. Sharing where I am, seeing where my friends are and have been, and being able to comment on these check-in’s  advances Facebook’s goal of helping people share more.

Facebook also has a fantastically large mobile user base which is growing faster than their web presence. From Facebook’s published stats, “There are more than 65 million active users currently accessing Facebook through their mobile devices.” Foursquare would add immense value to Facebook’s mobile offerings. If users became accustomed to checking-in everywhere they go, this simple activity would lead to more overall usage. After I check-in I might take a look at my Newsfeed and notice a friend uploaded some new photos from their latest night out, all the while I am seeing more highly targeted ads. This may be one of the most compelling reasons for acquiring Foursquare. Giving people more reason to engage is important to Facebook and Foursquare provides a clever Trojan horse for more usage. This stat provides credence to this claim, “People that use Facebook on their mobile devices are almost 50% more active on Facebook than non-mobile users.” In Facebook’s world, more usage leads to more revenue.

Facebook could certainly build this technology and product, so why buy Foursquare? Because it is more cost effective for them to acquire than build at this point. They are on a hiring tear and getting talented and motivated developers through a lightweight acquisition is a swift way to access the best and brightest. The recent acquisition of Friendfeed demonstrates Facebook isn’t afraid of this sort of thing, because the best and brightest are often building their own company or working at a hot new start-up.

Foursquare has recently raised another round of funding and is growing quite rapidly, so they may not be interested, but that doesn’t mean Facebook wouldn’t be a prime suitor. The two companies are well matched; Foursquare has locked onto an interesting social experience around shared place, which would be a logical next extension for Facebook in getting people to share more and be more connected.