Location-based services: Are they there yet?

We look at Facebook, Foursquare, Google Latitude and Yelp to see how their mobile location-based services have prospered -- or not.

1 2 3 Page 3
Page 3 of 3

There are a lot of compelling pieces here, pieces that would seem to be perfect for a success story. So what's the problem?

"Latitude was one of those things Google said 'Hey, we think this is something important, and we ought to have it out there,'" Christy says. But, he continues, they've done basically little else.

Silva agrees, seeing Latitude as one part of the giant Google Services machine. "Latitude is one asset that will make other assets better," Silva says. "It will probably be a super power for another Google application."

These are similar to the problems Facebook Places experienced when that service was initially launched: The service was released, it had big potential and then no one knew what to do with it. Unlike Facebook's pull-back-and-regroup effort now underway, it doesn't appear that Google is doing anything but pushing Latitude forward and hoping that the general rise in Google services adoption will drive more people into Latitude use.


Yelp has simultaneously delighted and angered businesses by enabling customers to immediately review service and products from local businesses, right from their mobile devices.

Any of the other services mentioned here can let you review a business, but for Yelp it's the reason for existing. "Yelp is all about the peer reviews," Christy says.


Yelp is interesting because it straddles two platforms. Desktop users can use Yelp as a pure "where-am-I-going-to-eat-tonight?" research assistant, making it more of a local search tool than a true LBS. But on mobile, it's an LBS through and through. Smartphone users get results close to where they are, while the Monocle feature enables users to hold up a camera-equipped device and see augmented reality overlays about the restaurants and businesses that are in front of them.

Businesses have had, until recently, one official way to interact with Yelp: Buying yellow-page style advertising on the Yelp site. This can be a bit dicey, though, because sometimes ads will appear next to negative reviews, which can negate the positive effects of the ad itself and waste a business' money.

In fact, there have been accusations that Yelp's reviews weren't reliable -- that, for example, businesses "astroturf" their entries by encouraging or even paying people to post positive reviews. Yelp CEO Jeremy Stoppelman countered these allegations in an October 2011 blog entry in which he writes, "We work hard to keep that trust by protecting the integrity of our review content, and use a number of methods to prevent shill or otherwise unreliable reviews from misleading consumers and harming businesses."

These bumps aside, Yelp has done very well in the business information space of LBS, inspiring a number of similar competitors. Yelp's ease of use and sheer number of businesses listed makes it an invaluable source of information, particularly for travelers new in town. Yelp's mobile client is easy to use and fast.

Lately, in an attempt to position itself more against Foursquare, Yelp has introduced check-ins for businesses, with very familiar-sounding gaming aspects: Users can become barons, lords, kings and queens of businesses, neighborhoods and cities, respectively. They can also see which businesses their friends have visited.

Silva sees some potential in Yelp moving forward, but he does not believe that Yelp has the chops to take Foursquare head-on, as it seems to be doing.

"They need to focus on the things in their service that are unique, like Monocle," Silva explains. "They should be improving on this AR [augmented reality] service and using it to help leaders like Foursquare augment their services."

Yelp has also added the capability for businesses to offer check-in offers to loyal customers -- again, very much like Foursquare. "It will be interesting to see how this particular feature plays out. We could see statistically more positive reviews from Yelp users (because they are getting loyalty rewards), or more upset businesses that are angry they are getting negative reviews even though they are giving out loyalty rewards," Christy says.


Location-based services can have a lot or a little to offer businesses, but all of them should be watched, because ultimately connecting customers to merchants is what any LBS has to do. And beyond the desktop, pure-play start-ups are figuring how to combine where you are into unique offerings designed to deliver real value and new customers wherever those customers may be.

The LBS game is still rapidly maturing, and as more smartphones penetrate the market, businesses would do well to consider their best LBS strategy, so they can find the customers that are seeking to find them.

Copyright © 2012 IDG Communications, Inc.

1 2 3 Page 3
Page 3 of 3
7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon