Archive for November, 2010

Twitter Squared: Places & Payments

November 15th, 2010

It’s been awhile now since Twitter began allowing users to tweet their location via its Places feature, but now it looks like the company is taking Places a step further with a feature that lets businesses “claim” a location or place.

The “claiming” of Places page could be a sign that Twitter is getting serious about competing in the geo-location space currently dominated by Facebook and Foursquare. It could give businesses a new avenue to promote themselves on Twitter, and it could also lead to new revenue possibilities for the microblogging service.

It creates much speculation about what Twitter plans to do with its Place pages? Is Twitter planning to launch a deals feature of its own?

According to officials at Twitter however “Places is not available at this time. We’re experimenting with a variety features. Allowing businesses to claim a Place is a natural thing to consider for the future.”

Being able to claim a place on Twitter would seem to suggest that the company is thinking about adding to their offering. Google, Facebook, and Foursquare all allow venue-owners to claim their places.

The real game here is around location-based analytics and ultimately new streams of revenue.  Many big brands are already on Twitter with full-time community managers in place to respond to every tweet pro or con.

So, what if Twitter did actually allow businesses to claim their Places? Let’s think for a moment what could happen if this was coupled with Jack Dorsey’s (co-founder of Twitter) other new company – Square?

Square was unveiled last December as a small credit card reader that could turn any iPhone into a mobile cash register. The startup has since unveiled apps for the iPad, Android and iPhone. And Dorsey brought on PayPal and Slide veteran Keith Rabois as General Manager in August.

So where is Square seeing the most traction? Without a doubt, small businesses, independent workers and merchants comprise most of Square’s rapidly growing user base. The technology only requires its tiny credit card scanner that fits into your audio jack and Square’s app. The device and the software are free, but Square takes a small percentage of each transaction (2.75% plus 15 cents for swiped transactions).

While merchants have to qualify for the app, Square’s qualification rules are more relaxed than those of standard credit card processors, There are no initiation fees, monthly minimums, and when merchants apply for a reader, Square doesn’t just focus on a credit check, but also takes into account the influence a company holds on Yelp, Twitter or Facebook.

Rabois says that Square is the “PayPal for the real world.” He also compares Square as the “Apple for financial services,” because it is so easy to use out of the box.

So, you’re a small or medium business.  You can claim you Place online, manage the social messaging promotion through Twitter, and process your payments through a small device plugged into your existing phone.  No additional hardware and low transaction fees.

Seem likes a match made in heaven, and all brought to you by one company – Twitter

I like to think of Jack Dorsey like a modern day John Chambers – outsource R&D by seeding a whole bunch of complimentary start-ups and once they’re ready – just roll them into the mothership.

Now if only I could get a Square to use hear in Canada for our events at the LBMA – life would be great!

Facebook + Apple: Masters of the Location Universe?

November 4th, 2010

Yesterday, Facebook along with more than 20 retail partners, including Gap, H&M, Lululemon, McDonalds’s, Starbucks and the San Francisco 49ers, announced a Facebook Deals component to augment their Places location-based service.

The move could bring a slew of new local and small business advertisers to the social network.  With more than 500 million users already, Deals could be the driver that brings location-based services to the masses.  And it’s needed – a study, also released yesterday by Pew Research indicates that only 4% of online adults use a location service like Foursquare or Gowalla.

The Deals service lets merchants push deals to their existing customers and attract new ones, according to Tim Kendall, Facebook’s director of monetization.

When users launch Facebook Places, they will see a listing of nearby venues, some which will have special icons indicating deals. They can pull up the deal, and with two clicks, they can claim it. When they go to the store or restaurant later, they can show the staff their Facebook app to redeem the deal.

The most interesting part of this announcement is that Facebook isn’t taking a cut of revenue for these discounts, posing a challenge to smaller competitors that use deal revenue as part of their business model. On a business’ Places page, they can set up an offer. There are four kinds:

  • Individual deals, which reward a customer if they check-in once.
  • Loyalty deals, which reward customers for a certain number of purchases or check-ins.
  • Friend deals, which reward customers if they bring in extra friends.
  • Charity deals, which allow businesses to donate to charity for every check-in they attract.

The Deals announcement is not however without speculation towards the future.

When Facebook called this press conference, much of the speculation was that they were going to announce their own phone – as referenced by TechCrunch in September.   That didn’t happen.  Instead, it appears that Apple and Facebook are getting closer and closer.

Could Apple be looking to buy Facebook?

Imagine if Facebook users suddenly all had iTunes and FaceTime accounts, giving Apple unquestioned dominance in online music and video chat. Apple and Facebook aren’t currently competing in any realm, but both are competing with Google, and there’s no love lost between Apple and Google.

Additionally, there’s significant synergy. The Facebook app for iPhone has been estimated to be one of the most used apps on the iPhone, with over 100 million active monthly users. One source, David Kirkpatrick, author of The Facebook Effect, claims that more than half of all usage of the iPhone of apps, other than those provided by the phone itself like telephony and email, is coming from Facebook.”

Apple has some $51 Billion in the bank meaning that they could afford to buy the social networking giant when it goes public.

Steve Jobs on a recent earnings call said “We strongly believe that one or more very strategic opportunities may come along, that we are in a unique position to take advantage of because of our strong cash position…And so I think that we’d like to continue to keep our powder dry, because we do feel that there are one or more strategic opportunities in the future. That’s the biggest reason.”

Perhaps the most important synergy is in the area of patents.  Facebook has been thinking about location for years and was recently granted a wide-reaching patent that could wipe newcomers off the social networking map.

Bnet, which broke the story, says the patent covers “a method of sharing locations of users participating in a social networking service at a geographic location” and the location is found using a “GPS Identifier”.

Similarly, Apple is hot on the patent bandwagon, in particular around NFC and location-based advertising.

Their recent patent application for “System and method for providing contextual advertisements according to dynamic pricing scheme” indicates.

Apple describes a mobile ad system that will work on your iPhone, iPod or iPad, and provide ads based on various direct or indirect marketing preferences through a “Local ad” app.  The owner of the network you are connected to at the time serves the ads.

A shopping mall owner, airport operator, or anyone else, providing Wi-Fi access, can serve ads from local merchants; wireless carrier can offer local ads, triggered by a location data from a base station or your GPS sensor, and search keywords you just entered in a search app, etc.

The combination of these two companies could indeed make them masters of the location-based universe.