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Microsoft's Millions to Seal the Deal on Foursquare's Turnaround

A new cash infusion and a strategic partnership with Microsoft may mean that Dennis Crowley's big Foursquare pivot is paying off.
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In the tech world, which is rife with cutthroat competition and backstabbing, it's a relief to see companies playing nice once in a while.

Microsoft and Foursquare's newly inked deal is one such partnership. On Tuesday, Microsoft announced a $15 million investment in Foursquare, as well as a strategic licensing deal that would enable the software and computing giant to incorporate Foursquare's rich mines of user data into its own products.

Some are heralding it as a second chance for Foursquare, which tried in vain to make a big business out of location-based check-ins and has instead pivoted to become a data broker for other technology companies. "This is huge validation for the stuff we've been working so hard on," Foursquare founder and CEO Dennis Crowley tells Bloomberg. "It's one of the leaders in the space we work in looking at us and saying we can really help power the next generation of devices."

And yet, an equally important question is: when two companies that aren't necessarily at the top of their game decide to join forces, will they be able to lift each other up, or will they bring each other down even further? What happens in the near future with this partnership might offer some lessons.

For Microsoft, it's too early to say whether data will solve the problem it's been grappling with for years, which is, namely, staying relevant as Apple and others continue to innovate at a rapid clip. (Even founder Bill Gates has admitted Microsoft has fallen behind on breakthrough technology.) Bloomberg, for one, reports that one early step Microsoft might take as a result of the partnership is integrating Foursquare's data into a new Siri-like voice activated assistant, temporarily referred to as Cortana.

Though neither company has commented publicly on this possibility, Zig Serafin, Microsoft's vice president of Bing search, tells Bloomberg, "We're building some contextually aware experiences to power some upcoming products in Windows Phone," Serafin said. "This will be for anywhere you get a Bing-powered experience."

Will a fresh data infusion breathe new life into Microsoft products? With a new CEO in place and Microsoft's founder Bill Gates out as chairman, anything could happen.

For Foursquare, at least, the odds that this is a good thing are high. Anyone with an Internet connection these days knows that data is the commodity of the moment. To have a giant like Microsoft demonstrate faith in the fact that Foursquare is the data provider of choice means something. And, with an extra $15 million in the bank (plus the $35 million Foursquare raised in December), the five-year-old company may be able to develop more sophisticated features to appeal to other tech companies interested in forging a similar partnership. For instance, Foursquare is already using data to power automatic suggestions to users based on their location data, regardless of whether or not the user has checked in to that location.

"We think about it like, with the best stuff we're working on, how do we make it more accessible to other companies?" Crowley tells Fast Company's Austin Carr. "If anything, this [deal with Microsoft] will illustrate how companies can improve existing products with Foursquare data. It's a starting point." 




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