SXSW reveals importance of location services

Thu Mar 18 2010, 08:43 AM

Analysts are saying the SXSW Interactive conference underlined the importance of the growing market for location-based services. This sector is expected to be worth more than USD12bn by 2014, according to Juniper Research, driven by increased smartphone use, mobile app adoption and geolocation technology such as GPS.

Many claim SXSW this year became a battle between two location services: newly funded Foursquare and Gowalla. Each firm offers a mobile social network that incorporates a social gaming element. Users can log ‘check-ins' at shops, bars and restaurants, earning points and qualifying for coupons and discounts in the process.

Foursquare and Gowalla were competing for the attention of the SXSW crowd, even throwing parties on the same night. Though neither firm scored a decisive victory, Foursquare maintained its lead. The company tweeted this week that it added 100,000 users in 10 days, meaning it now has well over 500,000 users. Gowalla is trailing with about 150,000 users.

But SXSW was not only about these two companies. Location network Loopt was at SXSW promoting its new iPhone app, while competitor MyTown from Booyah took the opportunity to announce a 3.0 upgrade. Directory service Yelp also sought the limelight by producing a guide to SXSW parties that was accessible via its mobile app.

Another firm, NearVerse, launched a location-based iPhone app called LoKast during SXSW. The app allows users to create temporary networks within a 300-foot boundary. Within the network, users can share photos, videos and music as well as chat and exchange contacts.

The buzz about location-based services has never been louder. In Foursquare's case, brands seem to be tripping over themselves to form partnerships and content deals. It is likely that many more firms will cosy up to Foursquare, Gowalla and others in the wake of the generous press coverage these firms received at SXSW.

However, Facebook, the world's biggest social network, is rumoured to be introducing location features at its f8 developer conference next month. Facebook has an audience of 400m and could hugely disrupt the market.