Foursquare Will Be Offering Deals from Groupon

Although Foursquare has a 10 million user base and a $600 million valuation, they had not been making money since the beginning.

They are partnering with half a million merchants for services that allows merchants to offer discounts and freebies to users who check in at their locations. However, merchants don’t pay for the privilege, and Foursquare could not make money from these services.

So now Foursquare is going to launch something that hopefully makes a better revenue model from them. They will be offering daily deals from partners such as Groupon, LivingSocial, Gilt Groupe and others on their location based service platform. The company thinks its location-tracking capability and data, such as where a subscriber’s friends are checking in, will help it better target daily deals.

According to Foursquare co-founder and CEO dennis Crowley, the company would be taking a cut of the revenue for passing these daily coupons to their users. He said they will observe users initial reaction of the change.

Let’s see whether their business model will work this time.


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