In the rush to improve local search facilities for mobile devices, Microsoft has been in danger of being left behind. Now a deal with Foursquare could be about to change that by altering the way Bing looks at locations in Windows 8 and on the Windows phone. This will give Microsoft something it has long coveted: a clearer understanding of where its users are.
At $15m, the deal did not come cheap. Foursquare is expected to claim other advantages too, such as free advertising across some of its larger partner’s services. Though the details were not disclosed, it is understood that a license deal has been agreed upon that will enable Foursquare to continue making money when Microsoft uses its data.
Foursquare made a statement about the deal: “So in the near future, when you use Microsoft devices powered by the Windows and Windows Phone operating systems and products like Bing, places will be enhanced by Foursquare to provide contextually-aware experiences and the best recommendations of any service in the world.”
Bing has spent some years trying to improve its contextual awareness so that it can be more proactive in supplying users with the search results they want. Rather than relying on user check-ins, Foursquare can track movements unobtrusively so that Microsoft will know the users’ habits and can make immediate suggestions. As an example, this could be nearby restaurants when it notices that users are in unfamiliar places at a time when they usually eat lunch.
Despite the importance of this deal to Microsoft, it is not exclusive; Foursquare is free to make similar deals elsewhere. This suggests that Microsoft is not interested in the exclusivity of what its junior partner has to offer as much as how it can build on this service to develop a strong appeal to advertisers. Google, Facebook and Apple have all been through this process before, but they developed their systems around older, cruder location-fix systems.
Because all Foursquare’s users have, in signing up, consented to be tracked they are likely to have a more positive reaction to ads. If this can be shown to apply in practice, it may see a flood of new customers heading Bing’s way, potentially providing a solution to the search engine’s ongoing revenue problems. Meanwhile, the software start-up that everybody thought would go under sometime this year is now once again a real player.