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Thursday, August 25, 2011

Location: Next Stage In The Evolution Of Social Networking

8:04 PM Posted by Deepak Nayal , No comments
Location Based Social Networking (LBSN) is about connecting people with other people, events, businesses and other organizations in their current location. It connects the virtual world with the real one. While [general] social networks connect you with the same set of people no matter where you go, LBSNs also allow users to expand/modify their network based on their current location. LBSN, still in its infancy, can have profound impact on consumers and businesses.

Although LBSNs can be used from Desktop PCs, they are best utilized from mobile phones. This is why the market for location based services/networks has exploded due to exponential growth in smartphones (particularly, iPhone and Android). There are various ways in which an application or a device can identify your current location. The most reliable, convenient and accurate is GPS (Global Positioning System); however, this technology drains the batteries of mobile devices a lot faster than other options. Network Triangulation is another option used by non-GPS enabled mobile devices. Users' current location can also be identified by using scanners installed in particular locations. Applications can also scan codes (such as bar and QR) to identify and broadcast the current location. At its most basic, users can even input their current location themselves.

Players
Though bigger companies are also testing waters with location based services and networks, LBSN space is primarily dominated by new [and cool web 2.0] players. This infographic from JESS3 gives a great snapshot of this space. However, it does not give a true picture of the depth of services provided by players as it considers the number of members, which by default will be higher for the traditional mail and social networking sites, even if they do not provide better location-based services.
It is actually the smaller companies and startups that have done the most innovative work in this area - which is not surprising, considering that this is a new market. Some of the most interesting players in LBSN market are Foursquare, Gowalla, Brightkite, Loopt and SCVNGR. These companies are building platforms that users can use to connect with their network and other companies can use to connect with consumers. Foursquare, arguably, is the leader of this space and is considered by many as the equivalent of Facebook and Twitter in location-services space; according to its blog, Foursquare grew 3400% in 2010. A lot of LBSNs allow users to "check-in" to locations and earn points/badges in return, share their location with friends and identify other people checked in the same location. Some of them have also added gamification aspect to the location layer and enable users to explore places, earn badges, go on trails, etc. The location-based services landscape is not yet dominated by the social networking heavyweights - Facebook, Google and Twitter; however, once they do improve upon their location offerings, they can easily dominate this space leveraging their huge existing userbase.

Possibilities
LBSNs have gained a lot of interest lately, primarily because they leverage SoLoMo (social, local and mobile) - the current super mega trend enticing consumers, entrepreneurs and investors alike. The hype and interest is well deserved, and will surely increase in the near future, and that it because of the possibilities around LBSNs. You can not just connect with your friends and family but also other people near you, find out what is happening around you, and what all facilities are available near you. More interesting things can happen when you combine LBSN with other interesting trends such as group-buying/coupons and interest graphs. Shops can offer coupons to shoppers who have checked into malls. They can also provide group offers, which can only be unlocked when a minimum number of coupons are sold, prompting users to instantly set up a location-specific network and buy as a group. Other interesting applications of LBSNs can be unlocked when shops and businesses tap into interest graph of a particular user once he or she checks into a particular location. For example, when you check into a hotel, its service can tap into your interest graph and find out that you are interested in buildings with old architecture and like eating chinese food. Based on this information, the hotel can offer you tours to the nearby city buildings from medieval times and share the menu of its chinese restaurant. It can also automatically program the TV in your room so that architecture-related channels are lined up first. You can also be notified of other people checked into your hotel with similar interests. The possibilities are endless.

One of the best and most obvious uses of LBSNs is in the online dating industry. Once a guy checks into a bar, he can find out girls that have also checked-in there. If he finds out someone who matches his profile and interests, he can either approach her directly or send virtual gifts to that girl. The girl, on the other hand, can chose not to check into that location. Or after she has checked in, she can reject or block that guy, in case she is not interested in him. LBSNs can prove to be the best gift, since the internet, to the whole dating game. Applications such as Skout have already started to tap into this space.

LBSN, like other interesting trends - such as mobile, location and social networking, is useful for both consumers and businesses. The possibilities are extremely interesting and endless. However, we are still far away from enjoying the true benefits of LBSNs (and the larger, SoLoMo, trend). What we are seeing now is just the tip of the iceberg. With exponential growth in mobile [smart] phones, location-based services (including LBSNs) will surely become ubiquitous, and will become mandatory for businesses enabling them to be closer to their consumers.

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