The location startup is testing recommendations internally in a bid to generate more value for users and to increase engagement with their application. If you have a habit of eating high-end Mexican cuisine, Foursquare could suggest a wonderful place just a few blocks away that you had never heard of.
While this could be a boon for users looking to find new places to go and check in, this represents a clear and large business model for Foursquare. Just as Google gives away results to users and sells promoted rankings to the highest bidder, so could Foursquare let people businesses recommendations.
This has echoes of Twitter’s promoted tweets and trends, where brands can pay to be included in a list of organic results (market as paid, of course).
Recommendations would add greatly to the usefulness of Foursquare, especially if they were listed with the number of check ins needed to become mayor, and the rewards that the location offers to Foursquare users. The larger impact is that Foursquare may be able to tap a river of sustainable revenue even before they hit the mainstream.
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