Facebook May Thwart Location-Based Social Network Growth

There is so much activity in the location-based social network space with even Twitter and Facebook jumping into the fray. Companies like Foursquare, Gowalla and Brightkite are getting a lot of attention with successful rounds of funding added to their coffers. Third party developers are lining up to add APIs to their platforms similarly as to what they did with Twitter and Facebook last year. However the one hurdle that all LBSs face is the wall of privacy, and until they figure out how to meet that challenge, they run the risk of being overtaken by the larger social networks with built-in geo-location infrastructures.

Last month, Jason Kincaid from Techcrunch reported that Foursquare needed to be careful as Facebook is poised to dominate geolocation. While there has been no official announcements, Facebook recently edited its Privacy Policy to explicitly allow for location-based features. In tandem, and not to be outdone, Twitter just launched its Geolocation API.

So as the 'big guys' start to ponder infiltration, location-based social networks should heed this early clarion call. Foursquare and its league of LBS compatriots might be wise to spend more time in learning how best to handle privacy issues than developing more game-like features for their existing followers.

The most compelling part of location-based social networks is the ability to see at a glance what your friends are up to and "where" they're up for doing it. Unfortunately, most users don’t know all that many people on Foursquare, Brightkite or Gowalla yet. Most of one's friends on these networks are techies, the early adopters.

Mainstream users have not piled on just yet. The phenomenon is just too new. This is the problem Twitter had to contend with in the past. Even with a year of stellar growth and constant press attention, from own personal experience, I still have a good number of friends who will join Facebook before ever considering Twitter. Many don't understand its value proposition and discard it as a time-waster. Others feel the train has left the station, and don't want to take on the necessary learning curve to understand its nuances.

Facebook, on the other hand, due the size of its user population (over 350 million at last count) has built up a confidence factor. Also in most cases, one's circle of friends on Facebook are those that one would feel more comfortable in sharing one's location. This coupled with its robust system for managing privacy settings has laid the groundwork currently missing in Foursquare, Gowalla and Brightkite.

Additionally according to Kincaid, "The other key component is Facebook’s ubiquity on GPS-enabled smartphones. These are essential for updating your location on the go (which is where most of geo’s utility comes from). And Facebook is already dominating here. Facebook is the most popular iPhone/iPod Touch app of all time, and it has a strong presence on other platforms as well (it comes preinstalled on Android and Palm’s WebOS)."

Another issue is the number of followers. On Twitter, many of us start following a lot of people before feeling overwhelmed by the constant flow of updates from people you may not have that much affinity with. Even more so, it's hard to imagine these location-based services being able to work efficiently with having a large group of people you follow. This alone might be a prohibiting factor for growth in location-based social networks, as they exist today. Over time, like Twitter they may integrate with Tweetdeck-type apps that can organize followers into groups and lists according to priorities.

The other consideration that factors in here is asymmetrical versus symmetrical networks. On Twitter, you can follow others without them having to follow you. Foursquare, on the other hand is symmetrical (you have to accept and follow those that follow you). This once again goes back to the privacy issue, where knowledge of one's location needs to have approval by the other party.

However, as time goes on, I can see this issue waning some. If location-based networks focus more on venue offerings (similar to Foursquare's relationship with restaurants and bars providing users with discounts and specials), I think users will become more open to meeting "new" friends based on like-interests in close proximity. But like the Internet becoming a terrain for predators, it will always be incumbent on all these services to provide stringent privacy guidelines that allows users to pick and choose how they want their data viewed whether it be for online social interaction only, or  real-world meet-ups. 

My personal belief is if one's data remains 'by invitation ONLY,' once we agree on that principle, we can start talking about other technological barriers and safeguards such as location acquisition and capture, location notification and accuracy, location information accessibility, location history control and location ownership. It will just take the current location-based social networks to figure this out, before Facebook and Twitter infiltrate their turf anymore than already have.