Will Facebook Places sweep the competition off the map?

With Facebook rolling out its Places feature, what chance do other location-based services like Yelp, Foursquare, and Gowalla, have to survive?

Facebook launched its Places service with a lot of fanfare on Wednesday. Once it rolls out, which is happening today, Places will let you use your mobile phone's GPS to "check in" when you visit movie theaters, restaurants, and other locations. If you're familiar with Foursqare and Gowalla, it's a lot like that.

Facebook Places

Facebook offers one clear advantage over the competition: Critical mass. With more than 500 million users around the world, chances are your friends are on Facebook, and they're not on competing location-based services. The competition works around that problem by integrating with Facebook and Twitter, where your friends actually are. But Facebook has a direct line to your social and professional circle.

With Facebook playing the Places game, the competition is going to have to offer extra value, or they'll get stomped flat. What do they have to offer?

Yelp could be in pretty good shape from all this. Check-ins are a recent sideline for Yelp, their main offering is reviews of various locations.

Gowalla, which has until now been something of a me-too product to Foursquare, could actually find itself strengthened by Facebook's entry into the location market. Gowalla lets you collect virtual items and souvenirs when you visit various locations, and follow "trips" in areas, created by outfits like National Geographic, USA Today, CNNMoney, and others. I can see Gowalla evolving into a fun little game, layered on top of Facebook Places, where you follow scavenger hunts and swap souvenirs with your friends.

Simlarly, Booyah offers games based on location services. Booyah runs MyTown, where you can buy and sell your favorite stores and hangouts, level up, earn points, and get rewards to use at locations. The company plans to launch InCrowd, a location-based game designed to work with Facebook.

That leaves Foursquare. That company has, until now, been the leader in location-based services, and they look to be most at risk from Facebook Places, because they seem to have the least differentiation. The core functionality is the same as Facebook's: You check in to locations and share check-in information with your friends. Foursquare offers add-ons: You can collect badges for multiple check-ins. If you're the most-frequent-visitor to a particular location, you're declared the "mayor" of that spot. And some places, like Starbucks, make special offers for mayors and other Foursquare users. Still, this doesn't seem like enough for little Foursquare to win out over giant Facebook.

There's another way any of these companies can beat Facebook: Execution. If Facebook Places proves to be clumsy, but the competition is agile, then Facebook will lose in this market.

Does Facebook view this as a competition? They seem to have a split personality on the issue. On the one hand, executives from Yelp, Gowalla, Foursquare, and Booyah joined Facebook in its announcement of Places on Wednesday.

On the other hand, Facebook seems to be signaling more hostile intent with its Places logo. It's a four, in a square.

Update: Foursquare plans to beef up tips, to-dos, and specials to stay competitive, according to an interview with CEO and co-founder Dennis Crowley by Mashable's Jennifer Van Grove. 

"Facebook Places makes location a commodity," writes ReadWriteWeb's Sarah Perez. By that logic, Facebook Places isn't a threat to services like Foursquare, Yelp, Gowalla, and Booyah at all. The Facebook service lifts the burden of managing check-ins and the databases of locations, leaving other services free to innovate and provide value in other ways.

Mitch Wagner

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is a freelance technology journalist and social media strategist.

Copyright © 2010 IDG Communications, Inc.

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