Foursquare: Where Are Location Sites Taking Us?

Where's the craze for location sites like Foursquare taking us?

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Peter Arkle for TIME

Where others see a city map, Ryan Long sees a game board. The game is Foursquare, but not the way you played it in grade school. On Foursquare.com every bar, every restaurant, every office building is another space to be conquered: check in on the site enough times from a particular location and you're proclaimed mayor of that place. Long, 33, an insurance-settlement consultant in Overland Park, Kans., has already earned one of Foursquare's coveted Supermayor badges by becoming the mayor of 10 locations simultaneously. "It started as me wondering what the heck this [site] is, but now it's budded into an everyday thing and more of an addiction," Long says.

Social media has lit out for the territory. Since Foursquare launched in March 2009, some 2.5 million people have started playing. That's still small compared with other social-media sites, but the eagerness of Foursquare's users to broadcast their whereabouts has not gone unnoticed by the heavyweights. On Aug. 18, Facebook (500 million users) rolled out a feature that lets users attach a location to their status updates, and Twitter (somewhere north of 200 million users) in March began letting people include a place as part of their tweets.

What's driving the location craze? Social-media magnates still need to come up with ways to monetize their sites, which are free to users. Foursquare was one of the first companies to bet that users would be willing to share their location in exchange for discounts at the places they're checking in from. Foursquare is currently willing to serve up local businesses' coupons for free, but it's something that could prove a lucrative revenue model as the site grows. This pilot program has taken off, expanding from a handful of stores to more than 15,000, including big brands like Starbucks and Pizza Hut. "We're seeing these crazy scenarios where the check-ins at Starbucks are increasing by a little more than 50%," says founder Dennis Crowley. All that for $1 off a Frappucino.

Foursquare rewards users in nonmonetary ways as well. Check in 10 times a month at your health club and you'll get a Gym Rat badge. Check in four late nights in a row and you'll get a Bender badge. For help in earning a Supermayor badge, there's an iPhone app dubbed Mayorama that points out mayorless locations nearby. But a warning to those looking to land-grab: in February, Foursquare added code to prevent users from earning badges by checking in from far-flung locations without leaving the comfort of their couch.

Although check-in has managed to replace tweet as the Internet buzzword du jour, both Foursquare and Twitter want to downplay the act itself. "The check-in is really only the beginning of the story," says Crowley, a serial entrepreneur whose precursor to Foursquare, a site called Dodgeball, was purchased by Google in 2005. The ultimate aim of geocentric sites is less to pinpoint your location than to offer guidance on what experiences you should seek out (or avoid) there. Foursquare already does this a bit, accumulating tips and suggestions from users at each location, such as "Nice public restroom here" or "Crappy customer service there." Meanwhile, the site's closest rival, Gowalla, has captured nearly 400,000 users by becoming a constantly updated travel guide, letting users share photos and even create customized trips for future travelers who follow in their footsteps.

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