Foursquare raises $50 million -Click here http://bit.ly/mmBXJF for full article

Foursquare raises $50 million -Click here http://bit.ly/mmBXJF for full article

Fast-growing, location-based social networking service Foursquare has raised $50 million in venture funding. The company’s third round of financing was led by Andreessen-Horowitz, a Menlo Park, Calif.-based venture capital firm that has funded several other high-profile tech startups including Skype, Facebook, Twitter and Groupon. Also participating in the funding were Union Square Ventures, Spark Capital and O’Reilly AlphaTech Ventures, all of whom are existing investors in the company. According to Foursquare, the company will use a major portion of the new funding to hire engineers to help build out its merchant offerings more rapidly.

Much of the investor interest in Foursquare comes from its emerging status as one of the Internet’s premier destinations for information on local businesses. Foursquare currently has over 10 million members who use the service regularly to get information on the best places within a neighborhood for shopping, dining, entertainment, pet care and other interests. Foursquare was one of the first social networks to introduce the concept of location-based networking. The service features a GPS application that lets members use their mobile phones to ‘check-in’ at participating businesses and collect discounts, coupons and other freebies from the merchant. The service awards badges, ‘mayorships’ and other similar incentives to encourage members to patronize local businesses. Foursquare lets people share details of their physical locations with other members and alerts them to any special deals, coupons or promotional offers being offered by businesses near their present location.

The service offers local businesses a plethora of new marketing opportunities. For instance, a merchant that establishes a presence on Foursquare immediately becomes visible to a much broader audience than would have been possible via traditional advertising channels such as a local newspaper. Business owners can also attract more traffic to their locations by advertising special deals, discounts and seasonal promotions via Foursquare. For instance, by offering special discounts to first-time visitors, businesses can attract new clientele. Foursquare’s GPS capabilities also offers an opportunity for businesses to try and attract clients who might be close to their locations. Some early adopters of the service have attempted to spur customer interest by giving away prizes and special raffles whenever Foursquare members check in at their locations.

Foursquare supports a feature that allows members to write reviews or submit comments about a particular business. This kind of word of mouth communication also gives businesses a way to leverage their reputations to attract new business.

Foursquare’s success has pushed several others in the same direction. Examples include Google, Facebook and Gowalla, all of whom have very similar services. For businesses, these online services represent terrific new marketing opportunities at relatively little cost.