Foursquare merges with Factual to create a location data powerhouse
The new company will have a combined revenue of about $150 million per year, but details of the transaction were not disclosed.
Foursquare was founded back in 2009 and was originally known as a location-centered social network, where users could check in at different places and share that with their friends to earn badges. Over time, however, the company has shifted focus and become more of an advertising and marketing platform that uses location data as its main differentiator.
Foursquare’s platform is built on its Pilgrim technology, which the company says is more accurate than other location data services thanks to its decade-long history of user check-ins. The company hosts a back-end platform for brands and publishers to leverage its data, including an application programming interface and a software development kit.
The idea is that clients can use Foresquare to offer location-contextual experiences to users. Uber Technologies Inc., for example, uses Foursquare’s software so users can type in the name of a store where they want to be picked up, and it will automatically find the address on the map.
As for Factual, it began life also in 2009 as a kind of repository for open data, but has since evolved into a marketing platform that also leverages location data. The company’s main advantage is it gives marketers the ability to track their advertising campaigns and see if they’re successful in persuading people to actually go out and physically visit a store.
In an interview with the Wall Street Journal, Foursquare Chief Executive Officer David Shim (pictured, center, next to Foursquare founder Dennis Crowley, left) said the two companies offer similar capabilities and services. However, he said Factual’s audience data is superior to Foursquare’s.
“When it comes to audience segments, Factual is No. 1; we’re not No. 1,” he said. “Foursquare is No. 1 when it comes to attribution and ad effectiveness, when it comes to app developer tools.”
The primary use for location data is audience segmentation and offline attribution, but in recent weeks it has become a vital tool for researchers to track the effectiveness of “social distancing” amid the coronavirus outbreak. Another possible use for location data could be to replace cookies as trackers on websites, Shim said.
Constellation Research Inc. analyst Holger Mueller told SiliconANGLE the merger effectively marks the end of Foursquare as one of the original innovators in social networking, and serves as an example that no one can afford to rest on their laurels.
“Software companies constantly need to expand their value proposition,” Mueller said. “Foursquare certainly tried, but remained location-centric and now sees itself combined with Factual, which also has seen its odyssey from an open data platform to a location data provider.”
The new company will operate under the Foursquare name, with Shim assuming the CEO role. Factual founder and CEO Gil Ebaz (right) will join Foursquare’s board of directors and executive team, but his exact role wasn’t mentioned.
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