The Takeoff Episode 02: How Startups Can Adapt and Pivot Sponsored This content is created collaboratively with one of our sponsors.
This was the only logical next step for Foursquare, which has a wealth of clean, user-verified data and the need to enact a business model as quickly as possible.
Social app Foursquare may finally be figuring out its business model. The five-year old company says it will begin charging certain businesses fees to access its store of information on restaurants, shops, and venues in various cities around the world, according to the Wall Street Journal.
Chief operating officer Jeffrey Glueck says Foursquare plans to discuss payment options and service deals with developers that use its data the most, the article says. Ultimately this should affect less than one percent of the 63,000 companies that use the database.
Foursquare launched its namesake app in 2009. The social platform lets your friends know where you are and what you’re doing — it also enables you to review places you’re visiting, upload pictures, and make recommendations.
A number of developers at companies like Twitter, Pinterest, Vine, and Flickr use Foursquare’s data, collected from its 50 million users, to help pin people and their content to a local geographic location — some suspect this new monetization plan will put strain on Foursquare’s relationships with developers at other companies. But the company doesn’t seem concerned.
“It is important to stress these conversations are with large companies with substantial revenue, or issue hundreds of millions of API calls a year,” Foursquare said in a statement.
Regardless, this move will create a new, much-needed, revenue stream. Currently the company is supported by localized advertising revenue, a program it streamlined last year so small businesses could advertise without dealing with Foursquare’s sales team.
In May the company released a new social app, Swarm, and shortly thereafter announced that the company would be split into two platforms: one for social interactions and one for searchable recommendations.
Glueck, who joined Foursquare earlier this month, is a former CEO of Skyfire and former chief marketing officer at Travelocity.