Liz Gannes

Recent Posts by Liz Gannes

Foursquare and Groupon Planning Distribution Deal

Daily deals leader Groupon and social location innovator Foursquare are in partnership talks, according to multiple sources familiar with the matter.

The arrangement is likely to see Groupon deals targeted to Foursquare users’ check-ins. Mobile app users who tell their friends that they’re in the vicinity of a venue offering a discount are obviously prime customers.

Social distribution could help Groupon move beyond email lists to a more precise and targeted audience. And Foursquare wouldn’t mind the revenue it would get from these leads.

Such a deal is not without precedent. Groupon last week announced a deal to distribute its new Groupon Now real-time offers with Foursquare competitor Loopt. Loopt users now receive alerts when they’re close to a local deal, without even opening the app. However, Groupon Now is currently only available in Chicago.

Loopt counts five million users, while Foursquare has nine million. While neither are huge services, they do have a significant portion of the smartphone users in the world who want to share their current location with their friends.

Groupon CEO Andrew Mason visited Foursquare’s New York office last week, and it wasn’t the first time he’d stopped by recently, said sources. Foursquare did not reply to a request for comment.

Groupon spokeswoman Julie Mossler’s statement on a potential Foursquare partnership was the following:

“We see a lot of potential for Groupon Now! to be showcased via services like Loopt. No bigger picture to announce yet, but stay tuned for additional collaborations.”

I still think Groupon and Foursquare might be better off combining forces even more tightly, given their complementary talents. As I wrote in December after Groupon walked away from an offer to be bought by Google:

Groupon has a working business model, local merchant relationships and an ample waitlist, and a salesforce numbering in the thousands.

Meanwhile, Foursquare represents the areas where Groupon needs to grow. Foursquare has innovated around GPS and the mobile application experience, which is obviously where local is headed. Foursquare also has insight into incentivizing users to connect to merchants and each other on a daily basis rather than for a one-time deal. It could provide the tools to help users and merchants have a lasting, mutually beneficial relationship.

Put more simply, Groupon excels at recruiting customers, while Foursquare’s emerging strength is loyalty and retention.

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