Location-based mobile social networking worth US3.3bn by 2013… 

Location-based services offered by the like of GyPSii, Pelago and Loopt are revolutionising social networking by allowing users to share real-life experiences via geo-tagged user-generated multimedia content, exchange recommendations about places, identify nearby friends and set up ad hoc face to face meetings. So argues ‘Location-based Mobile Social Networking’, a recent study from ABI Research.

According to ABI, location-based mobile social networking constitutes a framework within which previously independently-launched location-based services such as search, friend-finder, people tracking and user-generated content find new momentum by complementing and reinforcing each other. ABI says it comes as no surprise that Nokia is moving in quickly with the acquisition of Plazes and the beta launch of the location-enabled Nokia Chat social instant messaging application.

New positioning technologies such as Skyhook Wireless’s hybrid solution combining GPS, Wi-Fi- and Cell-ID for improved indoor coverage have been licensed to several social networking vendors. Many social sites are powered by open location-based platforms such as uLocate’s Where.

“Location-based mobile social networking revenues will reach US$3.3bn by 2013, but successful business models may differ from what many observers expect,” suggests ABI Research principal analyst Dominique Bonte. “While location-based advertising integrated with sophisticated algorithms holds a lot of promise, the current reality rather points to licensing and revenue-sharing models as the way forward for social networking start-ups to grow their customer base and reach profitability. Recent evidence: the agreements between GyPSii and both Garmin and Samsung. Similarly, Loopt has established partnerships with all major US cellular carriers.”

However, ABI reckons that several factors are hindering mass market adoption of location-based mobile social networking. Privacy concerns are still a major issue. Many small players are struggling to create sufficient brand awareness in a fragmented market. And the traditional concerns about the cost of data plans also cast their shadow over social networking.

Where…and tear
There’s some other non-trivial challenges too. For Meetro, one of the pioneers, if not the pioneer, of location-based social networking, failure to achieve scale was a major factor contributing to its demise.

In a Web posting Meetro entitled ‘Meetro Post Mortem’ the company’s co-founder and ceo Paul Bragiel made the following observations.

“Most importantly, there was a ‘location problem’. It’s really hard to grow a product that’s 100% focused on where you physically are.”

“A product with a HUGE audience turns it on. I’m talking about a MySpace, Facebook, etc. Something that has a really rabid audience, where it would be a great feature addition.”

“A company has a really long term vision and builds it out city by city. This is similar to the approach taken by Yelp. They know it’s not easy and I know first hand that they are putting a lot of effort into fostering their communities. It’s an ongoing job. You simply can’t establish a city and then let it fend for itself.”

“Someone creates a viral product that grows like crazy but location isn’t the core feature. It just happens to be part of the bigger whole and as people use it more and more, they realise that the location piece built into it has become increasingly valuable for them. I don’t know what this product is, otherwise I would be building it right now.”

Then there was the ‘download problem’.
“In the end, though, the drop-off that happened once people had to download and install Meetro was HUGE and didn’t help us at all. If I recall, it was something in the 80 to 90% range. It crushed adoption rates.”

And finally the ‘real time’ problem.
“This one is similar to the location problem in that if someone wasn’t online when you were online, they were no good to you. While the realtime chat aspect of the application made for some really serendipitous meetings, it also made it harder for people to gauge the activity of their communities, especially if they logged in at odd hours, people were set as away, etc.”

Undaunted, though, Bragiel subsequently became one of the leading lights behind Lefora, a free forum and community hosting website. At the end of last month Lefora announced it had passed the 20,000 forums hosted mark.
John Williamson