Gowalla Team's Move to Facebook Signals New Challenge to Foursquare

The battle over who owns the "check-in" just got a little less cluttered. Gowalla's co-founder Josh Williams announced on the site's blog this afternoon that he and fellow co-founder Scott Raymond would be taking their talents to Facebook, along with members of their Austin-based team. Gowalla as a service will be wound down early next year, and Facebook won't be acquiring any of its user data. The announcement is anticlimactic in the sense that any meaningful competition between Gowalla and Foursquare -- which launched on the same day in March 2009 -- has long been over. Foursquare has 15 million users and launched a high-profile partnership with American Express allowing cardholders to claim deals when checking in at participating locations, while Gowalla has just 2 million users and no such prominent partners. The chasm in venture capital was also widening between the two, with Foursquare operating on more than $70 million in funding, while Gowalla had raised just $10.4 million. More significant for the long-term future of the check-in is the fact that Facebook perhaps hasn't abandoned the dream of building its own Foursquare-killer. The social network launched "Places" with fanfare in August 2010 but quietly shut it down a year later, while still allowing users to attach their location to a status update. But hiring a crack location-based engineering and design team is a sign that Facebook hasn't ceded the space to the startup that owned it first, though it hasn't yet announced what product the Gowalla team will be developing when they arrive in Palo Alto next month. Facebook may have dialed back its early location-based service ambitions, but it's one area of social media that has brands very excited. As consumers declare their location, they create a rich vein of targeting data, as well as an opportunity for marketers to influence behavior with real-time offers sent to phones. As Facebook cruises toward an IPO -- likely in the first half of 2012 -- it is intent on showing investors and the public that it can scale revenue, and location services could well become a big part of that mix. No purchase price has been reported, and Facebook isn't disclosing it, but it could verge on zero since Facebook isn't acquiring a tech platform or data. But having a new top boss probably wasn't a hard sell for Gowalla employees, considering they'll be joining Facebook just months before its expected IPO, which could have a $100 billion valuation. Though the competition could simply be brought to life in a new form -- and one backed by Facebook's seemingly limitless resources -- it seems likely that people were high-fiving at Foursquare's New York office today. When the concept of the check-in was introduced, plenty of watchers speculated it was a fad, but Foursquare's strong growth -- it added about 5 million users since around June, when it announced passing the 10 million threshold -- says otherwise. And though the company still hasn't publicly settled on any business model and still only has custom virtual badges for brands as its only source of revenue, its impassioned and growing user base is a strong asset from which to build.

Gowalla Team's Move to Facebook Signals New Challenge to Foursquare

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