The technology community seems to have turned on Foursquare in recent months, with people like former Square COO Keith Rabois publicly deriding the once-adored company. Dennis Crowley, the company’s founder, responded to criticism Monday morning, painting Rabois as a misinformed investor, defending his own stake as an acting board member at Yelp.
“What no one has pointed out is that [Rabois] is on the board of Yelp,” said Crowley, during an interview at TechCrunch Disrupt in New York City. “We’re basically reinventing local search… If I was on the board of Yelp, I would be scared, too.”
Foursqaure capped off its nearly yearlong transition into a local discovery service earlier this month, releasing a major update to its mobile application that brought search features to the forefront of the service. The update put the New York-based startup on a collision course with the publicly traded Yelp, pitting the two companies in an indirect (if not lopsided) battle over the future of local discovery.
Today, Foursquare service has 30 million users, a little less than a third of Yelp’s 100 million monthly unique visitors. During the interview Thursday morning, Crowley refuted rumors that the company’s growth was calcifying, saying that its user base continues to grow 10-30% a month.
“We’re still a relatively small company,” said Crowley. “The numbers aren’t huge yet, but you can see where the story is going.”
The revenue side of that story is just starting to pick up. Foursquare started to build out its national and local sales force in the beginning of the year, and the company is “routinely signing six figure deals with national retailers,” according to Crowley. And last week, AdAge reported that the startup was in the process of pitching agencies on using its data to target ads elsewhere.
What’s emerging is a three-pronged revenue strategy that includes building custom campaigns for national brands, selling native ads for local merchants, and a potential data-as-a-service offering for agencies and display advertising vendors. The data angle is a tricky, but potentially lucrative opportunity for Foursquare, which has developed one of the most popular location APIs over the last few years. The question for the company is how it will monetize those relationships.
“We’re generating all of this data that’s being used by us, but not by some of our other partners,” said Crowley. “We know what the interesting places are around this area on a Monday morning, and which ones are going to interest certain types of people, and which ones are going to be popular weeks from now. We own it, we built it, and no one else has that.”
It’s unclear how the company plans to generate revenue from the data; whether it will monetize the location API it offers for developers or just sell it to third-party advertisers for mobile targeting as AdAge reported. In the meantime, the data gives the startup a healthy foundation to compete against the content-centric Yelp.
Steven Jacobs is Street Fight’s deputy editor.