Foursquare’s main problem right now is that while it can build a great app, it hasn’t proven that it can build a great business.
It’s an issue that the company has had for a while now, but it’s reemerged in a strong way this week — first with Foursquare’s latest iOS app update, and then with its $41 million cash infusion. There’s a lot of pressure right now for Foursquare to prove it can make money.
So what’s CEO Dennis Crowley’s plan to make that happen? How about selling all of that check-in data his company is sitting on?
According to AdAge, Foursquare is working on an ad product that would allow third-party advertisers to use its data to target ads on external ad networks.
Sponsored by VB
The move makes a lot of sense. Foursquare has over 30 million users and they’ve checked in over 3.5 billion times so far. That’s a lot of data.
And it’s more than just numbers. Not only does Foursquare know where people check-in, but it can also tell you where people are likely to go next. That sort of contextual data will be a powerful tool for its advertising ambitions. As Crowley likes to point out, Foursquare wants to become “the location layer for the Internet.”
The move couldn’t come at a better time for Foursquare. While the company has introduced both in-app ads and promited lisitings to make money, those measures only helped it pull in $2 million last year, according to sources.
To understand the power of Foursquare’s data, check out the video below, which Crowley is particularly fond of.
VB’s research team is studying mobile user acquisition: Chime in here, and we’ll share the results.