Foursquare checks in on discount deals
Foursquare has attracted 20 million users to its social network. To make money, it plans to go the Groupon route, but with personalized deals.
Kai Ryssdal: If you're a social media afficionado, you're familiar with Foursquare. More than 20 million people use it to check in at their favorite coffee shop or bar or airport or wherever they happen to be, in case friends want to join them, I guess.
Popular as it is, Foursquare's still not makin' any profit. So it's getting into the daily deal game. Starting in July, Foursquare's going to offer Groupon-like discounts, but personalized. A new-ish twist on the difficult daily deal business model.
Marketplace's Sally Herships reports.
Sally Herships: Would you like a coupon for your favorite store? Of course you would! Foursquare is counting on it. The company won’t say much about how it’s new deals will work. But there could be a problem with offering coupons to consumers for places they already shop.
Ben Schachter is an Internet analyst with Macquarie.
Ben Schachter: Either they’ve already paid or they’re coming there specifically to buy something and you’re giving them a coupon for something they would have bought already. That’s not what the store owners want to do.
They want to build new business. And Foursquare says some of its deals will be designed to bring in first time customers. But look at Groupon and you’ll see that daily deals can only get a business so far.
Rick Summer is an equity analyst with Morningstar.
Rick Summer: Looking at other businesses that are trying to say, 'OK, how do we make money? Hey, let’s think about coupons, we have a little bit different value proposition.' I think that that ends up being a greater challenge.
Foursquare says it already offers discounts, but personalized deals will begin in July.
In New York, I’m Sally Herships for Marketplace.