The utility of location based services has a strong network effect. For finding friends, they need to be on the service. For coupons & deals, business developme

The utility of location based services has a strong network effect. For finding friends, they need to be on the service. For coupons & deals, business development is far easier with a larger audience. Interestingly, one way to be ubiquitous is to open up the service as a platform. That means that it makes sense for Facebook to let Foursquare & Gowalla use the platform. Those using Foursquare and feeding into Facebook make Facebook more useful. It also matters whether location is a way to drive engagement for Facebook, or if they expect deals to be a major revenue driver. I highly doubt even a large effort on local deals and coupons would earn significant revenue for Facebook relative to their astoundingly successful ad system. They aren’t mutually exclusive of course, in that they can have hooks for their ads to leverage places. Ignore for a moment that mobile ads are universally horrible and Facebook doesn’t have any (yet). This makes me think Foursquare can still grow by being the best place to find deals. From what I’ve seen, Foursquare’s business development is rock solid. Also, Foursquare’s mission isn’t about location based checkins but to make cities more useful. So I think everyone will be just fine.