Facebook's Potential LBS Faceplant
The Book behemoth is holding a press conference after hours today, and the general consensus is it will announce its entry into geo-location.
Specifically, most believe Facebook will announce a service that lets users tell their friends where they are through their handsets' GPS, but it could also work with third parties to target these users with marketing or implement other location-enhanced features.
The company's foray into location has been delayed due to privacy concerns, an issue that it's grappled with before and one that has also caused the wireless operators to tread lightly. Facebook held off announcing anything at its f8 conference in April, but has been working on the service for a while now. (See Carriers Beat Facebook to Location Game.)
A survey today from JiWire Inc. shows some potentially good news for Facebook. The location-based media company found that 51 percent of mobile users are willing to share their current location in exchange for relevant advertising, the emphasis being on relevant. People love maps, coupons, and discounts in their home markets or while traveling, JiWire says.
Not surprisingly, women and old people are more likely to get creeped out by LBS. JiWire found that 54 percent of men are willing to share location, while only 42 percent of women are. Further, mobile users ages 25 to 35 and 35 to 44 were more willing to share their current locations to receive relevant ads.
JiWire's findings suggest that consumers will most likely embrace the Facebook service, but Strategy Analytics Inc. analyst Josh Martin says it depends entirely on how the Book implements it.
"Facebook can really fall on its face if they fail to focus on privacy," Martin alliterates, "because it will be a real concern for people... If history is an indication of anything, as it often is, Facebook tends to err on the side of forgoing privacy rather than protecting it initially -- until there's an outcry."
If Facebook has a number of large, popular brands lined up at launch to provide deals for consumers, it could encourage those coupon-happy mobile users to sign up for the service, Martin says. But if the service is not opt-in or not explained thoroughly, backlash could ensue. While check-in services like Foursquare have risen to fame in the past year, they still represent a small swatch of mobile users. It would be detrimental to Facebook to assume everyone gets it, Martin says.
Still, with its more than 500 million users, many of which also have a mobile app on a GPS-enabled phone, Facebook is well positioned to dominate the LBS space if it plays its cards right. (See Facebook Reaches 500M Users.)
The service will be troubling news to the number of startups targeting the space with apps, but it won't likely change the game for the mobile operators, since most haven't been particularly active in the space, Martin says. On the flip side, it could encourage them to tie up with the smaller players and find opportunities to integrate apps into their own strong points, like access to consumers' credit card info and precise GPS location.
"It's going to be tough," Martin says of the road ahead for other LBS players. "People talk about the services out there today as if there's no way they'd go away. We name winners, but it's really early and two million users does not make an undefeatable service, which isn't to say [LBS apps] can't succeed -- but they have to be great."
— Sarah Reedy, Senior Reporter, Light Reading Mobile