That's kind of an interesting news for Microsoft users. After its early investment in Facebook, The Wall Street Journal reported yesterday that Microsoft is investing into Foursquare which helps the New York-based company to turn its location-based service into a sustainable business. According the the WSJ report, Microsoft has (already) invested US$ 15 million and has also agreed to a strategic partnership, Chief Executive Dennis Crowley said in an interview. However, the most important part of this investment is the multi-year contract, Microsoft has signed with Foursquare which allows Microsoft to use Foursquare data in services such as Windows Phone and the company's search engine.
It's said that Foursquare has collected data of more than 60 million restaurants, shops and other points of interest within cities, much of it entered by the app's 45 million users, who rely on the service to broadcast their location to friends and get tips and discounts on the places they go and that's the point. Since these are user generated data, not imported from other services, Foursquare basically owns these data while so called Foursquare "Superuser" help to keep the database up-to-date and clean (disclaimer: I'm also a Foursquare Superuser).
All these data are often used by 3rd party apps like InstaWeather, InstaPlace, etc. to mark a place, for instance where the photo was taken or where it belongs. And that's what Microsoft will also be able to use now, helping Microsoft generate smarter search results, or - as the WSJ highlights - "ping Window Mobile users when they're in the vicinity of a great new restaurant they might like".
According to WSJ, Microsoft becomes Foursquare's single biggest data licensee, though Crowley declined to specify how much the contract is worth. However, the deal with Microsoft is said to not be exclusive and does not change the terms of its deals with other companies that receive its data, Crowley said.
I said it before and often repeated it. Foursquare should and will stay free or charge and they would be dumb if they would display ads in their mobile apps. The real value and asset of Foursquare is the user contributed data of locations, Foursquare virtually owns. They don't have to pay license fees but instead this allows Foursquare to license its data, without the need to sell user profiles.
Cheers ~ Arne