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Yahoo! (YHOO) and Facebook both tried to buy Foursquare, but the company instead wanted to stay independent (taking a recent $20 million investment from Andreessen Horowitz). Then again, this scrappy startup is one of the hottest in tech. Basically, Foursquare allows people to use their smartphones to indicate when and where they are checking-in to a place, such as a bar, restaurant or nightclub. True, the user base is still relatively small, with about two million users. However, the company growth ramp is apparently stronger than Twitter's during the same phase in its history.
No doubt, this is attracting the attention search giants like Google (GOOG), Microsoft (MSFT) and Yahoo. They see a new source of ad revenues, especially for local businesses.
At the same time, the search giants want to learn as much as possible about location services as well as real-time data. So what better why then linking up with Foursquare on a licensing deal?
But there is likely to be a steep price tag for this -- especially if it involves an exclusive. But the search giants have plenty of cash. And Google could be the front runner. Keep in mind that Foursquare's cofounder, Dennis Crowley, sold his last company to them back in 2005 (it was another location service called Dodgeball).
Tom Taulli is also the author of several books, including the Complete M&A Handbook. He can be reached at his blog.
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