Yahoo is rumored to be in talks with the check-in app Foursquare, because the tech company wants access to the startup's data on businesses and venues.
While the once startup darling may not have figured out a great way to monetize its business, other companies are realizing that its 4 billion check-ins across the world count for something -- mainly possible ads, according to BuzzFeed. Yahoo is looking for a partnership according to the report, but the tech company has also showing interest in acquiring Foursquare, AllThingsD reported in June.
The New York-based startup only made $2 million in advertising revenue in 2012, and even doubling each quarter still makes the startup growing only modestly. Instead, analysts are thinking that the four-year-old Foursquare may be more profitable giving up its data about restaurants and other venues to a company that can monetize it more efficiently. (Foursquare is in a partnership with Gnip, a company that sells data to social media, but Yahoo is a whole different and probably much more effective distribution system.)
Some of the impetus may be Google's $1.3 billion acquisition
of social-mapping app Waze, showing that tech companies are willing to pay billions for databases of user information. Foursquare's location-based app includes extensive profiles with popular times to visit, weather, photos and other details. It's essentially a huge interactive map.
Although neither Yahoo nor Foursquare commented on the talks or possible partnership, Holder Luedorf, head of business development at Foursquare told BuzzFeed that his company is valuable. "We can obviously not comment on deals that aren’t done, but what I would say is there (are) a lot of very well-known companies that have expressed extreme interest in our data,” he said. “If the Instagrams and Wazes are of any interest, to them location is even more core.”
In the past, Yahoo has tried to buy Foursquare, only to have talks stall. However, partnering with the startup could mean less or no money upfront and plenty in the back. If the deal is fair, Yahoo would be foolish not to use Foursquare's data and gain serious ad revenue.
Published at 8:41 AM PDT on Aug 22, 2013