Foursquare finally serious about making money

In what seems a natural succession its recent series of updates, location-based social network Foursquare has launched a revenue-generating product. Following the same route as Twitter and Facebook, the service launched “Promoted Updates” to help selected merchants promote their products and business.

“This is the first time ever that we’re allowing businesses to pay to promote their business in Foursquare,” product manager Noah Weiss told Venturebeat in an interview. “It’s obviously a very exciting milestone for us.”

Promoted updates which work just as local updates do, except paid for updates will appear in a prominent position in the “Explore” tab in Foursquare. In June, the service completely revamped its look and feel to encourage more app engagement.

A product with a revenue stream is a natural progression for the service which has been focusing on its growing user-base and developing a product that’s more than just about “check-ins”. These updates will only appear on your screen if you’re nearby. It will also show relevant businesses, based on your previous check-ins, unlocked specials, and even the time of day making it a natural fit for the “Explore” tab.

“We’ve been developing these two in parallel for a while,” Weiss said. “Local Updates are really about engaging with your existing customers when they’re in the feed, when they’re nearby. [Promoted Updates]… are about showing your business more prominently, hopefully with a compelling piece of content, in the Explore tab, which is where our users go when they’re actually looking for ideas for what to do next in the real world.”

According to a report from Fast Company, these promoted updates will work very much like Twitter’s Promoted Tweets: “Promoted Updates work on a cost-per-action model, in which merchants pay each time a user checks into their business, unlocks a special, or otherwise actively engages with the update”.

“Users love our specials and hearing from merchants, they just don’t hear enough from them,” Foursquare’s chief revenue officer Steven Rosenblatt told Fast Company. “By allowing businesses to really put themselves out there, we give users more of the surprise and delight they’re looking for.”

Currently only about 20 US-based merchants — such as Old Navy, Best Buy, Walgreen’s, and sandwich shop ‘wichcraft — are testing the product.

After three years and 20-million users, Foursquare is ready to step up to the big leagues of social networking.

Photo credit: Sint Smeding/Flickr