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Facebook Takes on Foursquare

Social media giant's entry into location-based services could help the market go mainstream -- and give small businesses a better way to target advertising.

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Facebook launched its answer to location-based services such as Foursquare and Gowalla on Wednesday -- a feature that automatically shares information on where users are with their online friends.

The hotly anticipated feature – which uses the GPS on smartphones – allows users to "check in" at locations which will then be shared with their friends and Facebook network. Users also will be able to browse shops, clubs and nearby venues to see which friends are in the neighborhood.

Places, as the features is called, is expected to help Facebook pull in local and small-business advertising, though the company said it had no immediate plans to pursue that revenue.

"Starting today, you can immediately tell people about that favorite spot with Facebook Places," Michael Eyal Sharon, Places product manager, said in a blog post."You can share where you are and the friends you're with in real time from your mobile device."

For early adopters of social media, Places is nothing new, though with Facebook's involvement there's a good chance that location-based social networking finally will go mainstream. The fledgling location-based sector is expected to become a billion dollar market, targeting advertising or promotions at people based on proximity. (Starbucks, for example, used a Foursquare promotion to attract a million customers to its stores in a day.) Media research firm Borrell Associates has estimated that such services could generate as much as $4.1 billion in annual ad sales by 2015.

"Location gives marketers a great way to target customers," Debra Williamson, an analyst with eMarketer, told the New York Times. "The whole idea is to reach people at the point of decision before they have to clip a coupon or perform a search."

Places is available first as an update to Facebook's app for the Apple iPhone, while other smartphone users can log onto touch.facebook.com. Updated apps for Blackberry, Android and other handsets are expected in the next few months. Nearly one third of Facebook's 500 million users access the site by mobile, the company says.

Other location-based services say they see Facebook's entry in the field as validation of what they're doing -- more as opportunity than competition. Foursquare, Gowalla, Booyah and Loopt all are building on top of the Facebook platform, as is online review site Yelp, which promised that a Places application for iPhones and Android-based smartphones will be out Thursday.
 
Places is likely to spark fresh concerns about privacy. After a string of controversies about the site's safety, Facebook simplified its privacy settings in May. 

Critics will note that the primary location setting is switched on by default, which means any "places" tags will automatically be shared with immediate friends.

Ahead of the Places launch, Foursquare announced new privacy settings, which make it easier for users to hide their e-mail address and phone numbers, to opt out of automatic check-in at certain venues, and to choose which lists they appear on. It allows them to control whether or not they publish their Foursquare activity to Facebook and Twitter, and decide whether they want companies and businesses to know if they're a regular.

Last updated: Aug 19, 2010

COURTNEY RUBIN

Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.




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