Foursquare has served notice on its largest customers that it plans to levy a charge on them to use its extensive database of restaurants, shops and other venues in an attempt to monetise the content it has garnered from user “check-ins”.
The startup, which has been around for five years, is taking a new course under recently appointed COO Jeffrey Glueck in order to improve the confidence of investors that are rumoured to be impatient over its business model.
Wall Street Journal sources report that it is already cutting deals with its heaviest users of data to pay fees to use its database or offer services to Foursquare in return. Each deal will be agreed on a case-by-case basis and Glueck stated that it affects under one per cent of the 63,000 companies that use Foursquare’s database.
There are over 50 million registered users of Foursquare’s service and despite this it has struggled to build a business model centred around local advertising and will look to data charging as a new stream of revenue. It’s likely this will pacify the venture capitalists that have already plunged $162 million [£95 million] in the firm and are reportedly “becoming impatient” according to the WSJ.
It doesn’t disclose revenue though people familiar with the financials stated that it was expected to generate between $15 million [£8.8 million] and $20 million [£11.75 million] in 2013 – an increase from just $2 million [£1.17 million] in 2012.
Foursquare has already reached an agreement with Microsoft that meant the latter pays licensing fees to include location data in its products like Bing and it’s thought the current deals being cut could be similar.
Related: Microsoft invests $15m in Foursquare
Most developers will continue to be able to use Foursquare services free of charge and Glueck added that the firm is “committed to supporting” its developer ecosystem.