Foursquare CEO Dennis Crowley and photographer Annie Liebowitz.
Foursquare will offer its data to advertisers, according to Ad Age. Users' check-in data will be made available so that online advertisers can target people with ads based on their location even when they're not on Foursquare.
Foursquare's current ad business is tiny, Ad Age notes:
Currently, Foursquare's revenue streams include money earned from businesses buying promoted listings and specials advertised solely within the app. The company launched those programs in June 2012, a month after it hired Steven Rosenblatt -- the company's inaugural Chief Revenue Officer -- to help monetize the service. But those ad products netted the company just $2 million in revenue in 2012.
$2 million just isn't enough to justify the $41 million it raised in debt to continue its operations.
The move also signals a growing intensity in the location-based ad sphere. Facebook and Twitter already offer similar location-targeting ads. Mobile phones, of course, can be geo-located by apps and ads already even without Foursquare's data.
Until now, Foursquare hasn’t spent a dime on advertising its services, even online. Although more than a million merchants have signed up to be listed on its app, the company allows only about fifty of them, mostly national chains like Starwood Hotels (HOT) and Walgreens (WAG), to buy ads. Crowley employs just 10 people to sell ad space on the app’s search function to big national accounts. By comparison, the online coupon site Groupon (GRPN) has thousands of salespeople.
Foursquare will let all the merchants it works with buy ads and will expand its sales team to about 40 people.
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