Foursquare is a local search company and plans to monetize by providing customized discounts, founder and CEO Dennis Crowley said last night at a Pando Daily event in New York, according to reports on Pando Daily and TechCrunch.
Merchants would be able to target discounts to particular user groups, such as repeat customers. Users would see the discounts under the Explore tab. Crowley described the monetization plan as similar to Google AdWords, but “targeted just at local, and exclusively on mobile.”
The company is doing a trial with about 25 paying customers, including Best Buy and Old Navy, to see if users respond to sponsored results.
The company has recently learned to use user data more effectively, making the monetization scheme viable.
“We just now have the tools to build the recommendation engine, to build the dashboard,” Crowley said.
Revenue models through 2015, Crowley said, put Foursquare “right in the middle of where Facebook or Twitter land with revenue-per-user.” But Crowley hopes the company will eventually surpass what those companies make per user.
“Someone has to be the test case,” he said. “You can build a big business making a lot of money off each user, not just amassing more users and showing dumb banner ads.”
Crowley sees Yelp, not Google or Facebook or other social location apps, as Foursquare’s main competitor.