Facebook Enters The Location-Based Realm & With It Comes The Dark Side of the Force

Star WarsBy now you’ve probably been aware of the latest announcement made by Facebook regarding their move into the location-based arena. Being called Facebook Places, the social network is banking on their 500 million monthly active users to start checking into places and basically do what millions have been doing with Foursquare and Gowalla.

Within the social media space, Facebook would probably be considered one of the proverbial “800 pound gorillas” along with search engine giant, Google – almost like how Microsoft at one point was the big guy in the room. So when Facebook CEO Mark Zuckerberg walked into the room yesterday to announce Facebook places, two things became absolutely certain:

  • Facebook’s check-in service concept had been rumored for quite some time – probably one of the best worst kept secret in the industry.
  • The location-based service marketplace had gone from a marketplace to a monopoly in one fell swoop.

And thus, the empire was born and like in Star Wars, “this is how a Republic ends…with thunderous applause.

What is the Republic?

Before Facebook’s foray into location, there were several different companies that formed the marketplace. In fact, there was so much competition out there that people were just a bit confused as to which one was really succeeding. All the news out there for the past few months have centered around Foursquare, Gowalla, Yelp and Brightkite and it seems as if Foursquare was taking the crown as it had amassed a following of over 2 million users and over 200,000 daily check-ins. But capitalism reigned supreme and these startups were doing just fine…until Facebook’s decided to change the marketplace.

The downfall of the Republic

Facebook Places announcement via @jolieodellWe all knew that Facebook was starting to move into this area.  Heck, Mashable reported that the social network was starting to add more location features to their site and frankly, it only seemed natural for them to integrate location, but what really brought it all downhill was when Facebook actually announced it. First, the universe was living in perfect harmony with location-based services operating like they were and pushing data to Facebook. But that all seemed to be a clever ruse and we soon found out that the main players of the game had all turned to the dark side and succumbed to the power of Facebook.

In effect, it’s almost as if Facebook made them all kneel before it lest they lose out on a key audience and market. Even at Facebook’s announcement last week, you had the major players on stage from Gowalla and Foursquare (photo courtesy: Jolie O’Dell/Mashable) where they voiced their support over Facebook’s interference in their bread & butter. For those watching the announcement, it may have seemed that Foursquare, the market leader, just got crushed by Facebook’s involvement and that seemed to be almost inevitable – but did showing of these two companies assuage people’s fears and make them acquiesce to this new feature?

Did the general public offer up thunderous applause?

Mark Zuckerberg: Emperor of Location-Based Services

Location based services comparedSo what must happen now? Facebook’s CEO Mark Zuckerberg has essentially gobbled up all resistance and put them under his power and can essentially leverage the awesome power that is Facebook to reap up the benefits. And just how powerful could Facebook Places become that it knocks all players out of the field and potentially establishes an impossible barrier to entry? Just look at the infographic generated by Mark Fidelman and you’ll see just how grave the situation is.

With a potential user base of over 500 million per month, Facebook is several times larger than all of the other location-based services (LBS) combined – even with just a fraction of their monthly users, Facebook could easily exceed the largest LBS and most likely, LBS users probably have a Facebook account, but it may not necessarily reciprocate with that respective network or even at all. Even right now, Facebook Places now allow their users to tag others there along with uploading photos to help bring it into context. And they’ve even considered how businesses can leverage – perhaps giving them leverage in the pseudo “location based wars”.

And let’s face it, Zuckerberg has got the most generic, yet specific social network out there right now. By having people check-into locations, they can share their experiences with their friends and have it instantly be viral or they could also write up reviews of a business, stripping away any hope of Yelp playing a major factor in user reviews. In fact, according to Mashable’s Facebook Places field guide, Facebook is going to make their information and data the law of the land:

…Facebook is opening up certain data that will allow any and all developers to access parts of Places. That means that a lot of applications will start pulling information from Places, scraping it for data about people, locations, groups and more.

There is a lot of data out there and Facebook has amassed quite a bit. For businesses and individuals to tap into that could result in large applications, privacy issues or whatever else people have planned. And let’s not forget that now that more people will use Facebook places because it’s more commonplace than, say, Foursquare or Gowalla, you also succumb to their privacy settings, which has differing opinions about its effectiveness.

Does this new model better clarify how businesses can use location services?

For those venues with specific and physical locations, location-based services can offer some good benefits and some major brands have started to pay attention – just look at what Bravo, VH1, the New Jersey Nets and others are doing with Foursquare and Gowalla. So with brands already creating Facebook fan pages (now known as “like” pages), what can they come to expect with Facebook Places? Well basically you can create a page from there and offer much more interaction that you could already get through existing LBS platforms.

According to Mashable’s field guide to Facebook Places, just set up a location and then claim it. Once you’ve done that, it will become a business page. From there, you just act the same way as you would with your brand page. But one thing to try and decipher is what will happen if you have multiple store locations, like a Radio Shack or McDonalds? Are those type of businesses going to need to staff someone in-house to manage the Facebook page? Or will it rest with just a Facebook page handled by corporate? It’s a real toss up and I suppose it will depend. It’s not far-fetched to have a store manager create and manage a social media presence for that location so anything is possible.

Impersonations of businesses also will not be possible, according to Facebook. It seems that in order for a location to be turned into a page, you will have to claim it. But to authenticate that claim, you will need to submit a license or some official documentation that Facebook will check to see if its valid. Then you will become the manager of that page. Once that’s done, just have people become fans of your page, check in, and start conversating.

Will the rebel alliance be crushed for once and for all?

Highly doubtful…but what will most likely happen, if it didn’t yet, is that Facebook Places will start to evolve and people will be frustrated with too many services that they’ll ultimately resign themselves to one location. The onus to innovate and come up with an incentive for customers to come back is with the location-based services. For now, it looks like Facebook remains the ultimate source of power in the galaxy & will only grow stronger. Fortunately we won’t see the end of LBS platforms for quite some time, but how will this end and who will be the hero of the war?

Image credit: Star Wars Rise of the Empire

By Ken Yeung

Ken Yeung is a journalist fascinated with the stories of the tech industry and internet culture. He's currently the Technology Editor at Flipboard, where he observes what's happening in the space while also identifying new topics of interest. In addition, he co-hosts the weekly internet show "The Created Economy," which focuses on what's happening to creators and influencers. Previously, he was a reporter for VentureBeat and The Next Web, covering tech startups, the industry's innovations and funding. Ken also has a newsletter you should also subscribe to called "Filed."