As we enter a time where every minute there are 20 hours of video content downloaded on YouTube and 100 million people are utilizing Facebook, the question arises what is next on the social media front. Much of the buzz we are hearing in the trades, from conferences we've attended and questions from our clients revolves around FourSquare.
FourSquare is a mobile social network. It is one part friend finder, one part social city to make recommendations on the best places to go, and one part social game. It uses GPS to track your location via your mobile device to let friends know where you are once you check into FourSquare. The interesting part for businesses is that the game portion of the network assigns points for every time a user checks in from a location. It will track how many times a user checks in from a particular location and users compete to become "the mayor" of their favorite bars, restaurants, stores, etc. There are currently 2,100 businesses offering discounts or freebies to FourSquare users. This provides a very entriquing opportunity for retail locations to incent loyalty through a social game.
The issue is how many users can FourSquare realistically expect to join and participate in this social game. This week they are expected to sign up their one-millionth user. That is pretty impressive growth over a short period of time and the continued growth of mobile devices should only help their ability to bring in new users. Currently, 80% of the US population owns some type of mobile device, including 31% that own a smartphone. We have not seen any statistics yet on the demographics of FourSquare's one million users, but we certainly expect it to be a young, single, early adopter profile.
Recent reports have indicated that Yahoo has offered anywhere between $100 million and $125 million to purchase FourSquare from the current CEO Dennis Crowley. While certainly an attractive offer for a social network with only one million users at this point, it will be interesting to see if Crowley accepts their offer. Yahoo was also interested in purchasing Facebook a few years ago during their infancy. While the offer to Facebook was much larger, reportedly around $1 billion, the current value of Facebook has far exceeded that $1 billion offer. It should also be noted that there are some competitors for FourSquare in the mobile social gaming world. Gowalla has a similar mobile location game although they have not gotten as much press or signed up as many users at this point.
This is a very exciting concept that could really tie social media directly to retail loyalty in a fun way for consumers. The important element for businesses, as with all social media, is to build a real strategy and understanding of how this would work and how you would incent customers who are FourSquare users. While testing new concepts is very important, it is not something that should be jumped into hastily.