Foursquare’s Expanded Offers May Pave Path to Viable Revenue Model

By Cameron Scott 

social media, social networks, local search, foursquare, dealsFoursquare is expanded the offers program it debuted with American Express in June 2011 to all major credit cards, the company said today.

Card holders sync their accounts to the Foursquare profile. When they check in to a location and pay through the card on file, the savings is automatically applied to their account. The feature, called Specials, launched with a $1 discount on any $10 order from Burger King.

By allowing all credit card holders to get discounts by checking in to the business through Foursquare, the company is hoping to encourage users to continue checking in. To continue to produce location data and reviews, Foursquare needs users to check in, but without more to offer than badges, the network has struggled to retain active users.

Foursquare takes a cut from each redeemed offer, which it hopes will create a sustainable revenue model for it as it increasingly caters to local businesses.

Early responses to the move among industry insiders was positive.

“Foursquare has an unusually good native business model,” Chris Dixon, a partner at the venture capital firm Andreessen Horowitz tweeted last night after CNET published an early exclusive.

Hunter Walk, who recently left Google to launch his own VC firm, Homebrew, called Foursquare’s “the most respectful win-win business model I’ve experienced of any social site.”

He was less sure the model would scale, because Foursquare will have to rely on continued willingness from merchants and credit card companies to promote their products in this way.

But Foursquare exec Noah Weiss assured Walk and others that the company was focused on “getting the customer and merchant experience right before scaling self-service” offers.