Check Out Who's Checking In at Facebook HQ

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Before Facebook goes public next year, it wants to know a little bit more about what you do when you're out in public.

The social networking giant is acquiring geo-social app startup Gowalla. Well, technically it's really just acquiring the two founders behind the Austin-based tech firm. Gowalla itself will be euthanized next month.

Gowalla and rival Foursquare launched just two years ago. Their premise was simple: using a smartphone's GPS features to allow people to "check in" when they're out at a restaurant, bar, or any venue.

Most consumers were aghast at the idea of intentionally pinpointing their exact whereabouts, and broadcasting them to other app users as well as creating status updates on Facebook and Twitter. Why would anyone tell a potential burglar that they're not home? What's the point in enabling potential stalkers?

However, Foursquare -- and to a lesser extent Gowalla -- succeeded by making it worth the risk and effort. It may have initially been just name-dropping hipsters using the apps, but there's real value in alerting nearby friends that you may actually be around. Then there were perks. Retailers began to offer discounts to frequent visitors. Why not? They were promoting the businesses by bragging to their friends that they were there.

Foursquare made folks virtual mayors of establishments. Gowalla's themed passports, stamps, and pins helped active users create a next-generation scrapbook of their experiences.

If You Can't Beat 'em, Buy 'em

No good model goes unduplicated. Facebook's Mark Zuckerberg had to decide if he wanted to acquire one of the two sites or simply roll out his own platform. He may have flirted with buying one of the upstarts and integrating it into Facebook, but ultimately chose the organic growth path.

This isn't the first time that a tech giant bought a potential disruptor only to shut it down.

It's a pretty standard practice with music websites. This is just what Apple (AAPL) did with Lala, Amazon.com (AMZN) did to Amie Street, and Universal Music did to the original MP3.com. Why should social check-in apps be any different?

Facebook is Going Places

Facebook Places launched last year. Leaning on advertising partner and minority investor Microsoft (MSFT) to provide the mapping landscape to get folks checked in, Zuckerberg immediately became a force in the check-in biz. Why go through Foursquare or Gowalla to post on Facebook when the Places icon is featured prominently on the popular Facebook smartphone app?

Like most things that Facebook does, Places is pretty plain-vanilla. It's largely a rudimentary check-in feature that can let you check into places, and automatically checks you out when your smartphone wanders elsewhere.

Facebook is ramping up the ability for merchants to offer deals through Places, but it's far behind what Groupon (GRPN) and Foursquare are doing on that front. Acquiring the masterminds behind Gowalla should give Places stickier social features and ideally a more robust design.

It's just a shame that Gowalla has to die to make it happen.

Gowalla's founders are now heading to California, where they will undoubtedly check in once they arrive at Facebook. Whether they can bring some of Gowalla's whimsical features to the otherwise bland Facebook Places remains to be seen.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services have recommended buying shares of Amazon.com, Microsoft, and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft and a bull call spread position in Apple.


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