Location-based services about to blossom

I often marvel that my iPhone is smarter than my computer. This is because the phone knows where it is. On the iPhone, a Google search turns up local options at the top of the list. The iPhone knows which buses go by this street, and when they arrive. When I'm traveling, I can pull off at exit 275, and the phone knows which hotels are nearby, making it easy to find the best deal for the night.

Marketers are licking their chops over this. It's one thing to have a thousand friends on Facebook. But businesses want customers. They want to drive transactions. Location-based services close the gap between relationships online and IRL ("in real life").

Any discussion of location-based services must include Twitter, even though Twitter is not directly a player in the location-based services marketplace. What Twitter does bring to the party is the largest mobile social network, real-time data and the open API that breeds third-party invention and reinvention. Most location-based services seamlessly integrate with Twitter.

Twitter has added geolocation to its database (to turn it on, log in to your account, and go to settings > account). While Twitter does not post your location, third-party applications can now access it. Twitter is essential for the growth of location-based services because it is by far the largest mobile social network as well as the also the largest real-time network.

Today, the hottest location-based service is Foursquare, which Mashable's Pete Cashmore has called "Next Year's Twitter."

Foursquare links to your Twitter account, and broadcasts your location and comments to people in your network. As you visit places, you "check in" and in the process unlock badges. The highest badge, Mayor, entitles you to discounts and other offers. Foursquare was developed by some of the team from Dodgeball, an earlier company that was acquired by Google. While Google has a location-based service (Latitude), the company doesn't appear to have done much with Dodgeball.

Foursquare functions as a "Saturday night leaderboard," for friends across the city. It helps answer the question, "Where is the fun tonight?" Soccer moms use Foursquare to arrange play dates.

While this sounds fun (and also trivial), it's important to think about this important characteristic: on Facebook, we talk, but getting together is an abstract concept. Foursquare drives interaction in real life. Think about your last visit to a coffee shop, with all those autonomous individuals in their own little bubbles, typing away on their netbooks. Foursquare has the potential to link those people together. Definitely a good thing.

Foursquare has just published its API, which means that programmers will be taking the code, mashing it up and creating new applications. This is exactly the same sort of innovation that has driven the success of Twitter, so give it some time and pay attention to how the service changes. The next killer app could be in here somewhere. 

Foursquare has also just expanded to new cities. To see a complete list, visit Foursquare's home page and look on the bottom right of the screen.

Foursquare and Latitude are but two of many emerging services that wrap up social features with real-time data and geolocation. Also in the mix are Loopt, Gowalla, Layar, Whrrl, Brightkite and Buzzd. Can you say shakeout?

While these emerging services may seem like silly uses of such powerful technology, I urge you to try one or two, and think about how they might evolve given the right mix of people, hardware and imagination.

We'll revisit location-based services and discuss some of the players in future posts.