(Or So Says Former Places Engineer) What Will Become of Foursquare, Gowalla & Others?

There's a very interesting question over on Q&A site Quora.com regarding last night's announcement of Facebook's geo-location effort, Facebook Places. Someone asked the question: "Are Foursquare and Gowalla going to survive now that Facebook Places has launched?"

This question was on the forefront of our minds, too, as we watched the somewhat-reluctant partners trotted out in support of Places during Facebook's press briefing last night. While some (Yelp, Booyah) appeared excited about the ability to integrate with Facebook's new service, others - most notably Foursquare, the startup whose geo-location service has been the media darling as of late - seemed a little unsure of themselves.

What will Become of Foursquare and Others?

In fact, Foursquare's VP of mobile products, Hogler Luedorf, appeared unenthusiastic, if not downright depressed, talking of how his company had been working in the field of location-based services for years. And in a backstage interview, Venture Beat's Cody Barbierri spoke to Foursquare's co-founder and chief exec, Dennis Crowley, who admitted that his company had no definite plans yet for Places, because, apparently, they didn't have early access to test the feature.

Still, don't count these small startups out just yet. "If Facebook thinks that location is a good idea, then we are on to something," Crowley said.

Location: The "Boring" Part of Geo-Location Services?

In fact, maybe Places could end up helping these companies grow by allowing them to focus on features and innovations, as opposed to the dreary but necessary location database maintenance currently required.

But that's not my suggestion - it comes from Yishan Wong, a former Facebook engineer whose last project at the company was working on the location platform.

According to his answer to the above question about Gowalla and Foursquare's survival, he reveals that the one of the main product questions at Facebook was, "How can we build a product that maximally benefits location-oriented startups?"

"There's no reason to copy and crush a competitor - none of them are profitable, or a threat," he says. That last point is debatable, in our minds. While none are a threat today, had a winner among location-based services emerged, it could have at least appeared on Facebook's radar the same way blips like Twitter and the now-acquired FriendFeed once did. Any network where users in large numbers are choosing to share data is a network Facebook wants to be a part of. Actually, it's a network Facebook wants to own.

Wong continues his response by suggesting that location-based services can now focus on the fun parts of building their business, and not the "boring" task of managing location databases.

"My guess is that Facebook's product tries to commoditize the 'boring' parts of location while providing a platform for the 'real' location-oriented companies (e.g. Foursquare, Gowalla, Booyah, Yelp) to build real products off of. Based on what I've heard from various sources, companies like Foursquare find the 'venue management' business to be quite tedious and not the real source of differentiating value... so commoditizing this aspect of their business doesn't threaten their core value proposition."

Location as Commodity

Incidentally, the idea of location databases as a commodity is a suggestion many have been making for some time now. Not only did TechCrunch suggest this back in April, as Wong notes, others, like Jeff Holden, CEO of location-based company and Whrrl maker Pelago, suggested that location-based check-in data was on its way to becoming a commodity.

"We'll see check-in data eventually becoming a commodity as more and more such services arise and a couple of the big social network companies step in with open check-in platforms," he wrote via blog post only days before Facebook's announcement.

For end users, the commoditization of this data, which would lead to syndication and aggregation of structured data, would have a big impact on the competitive playing field, Holden says. It would also address the issue of so-called check-in fatigue, as well as permit personalized recommendations, he says.

Compete on Features, Not on Geo-Databases

While it's true that there is value to the end user in the commoditization of location data, it's a commodity that many location-based companies likely did not want. Until now, they've been able to compete not only on features, but also on the richness, accuracy and completeness of their own geo-location databases. That selling point is now going to disappear, thanks to Facebook. Hopefully, the location-based startups have a few other ideas for retaining their users in this post-Places era.

For what it's worth, in an informal Twitter poll last night, several Foursquare users and friends of @rww responded that they'll stay with the service. "Nah not quitting 4sq or esp Gowalla in favor of places. I'm looking forward to the integration," said @tsudo. "I'll xpost to Places occasionally for innocuous checkins like conferences, but continue using 4SQ for trusted friends," said @LynneBaer. "Absolutely not - Foursquare's too great," replied @TheHarrisWalker. A few others replied that they don't plan on using either or are interested only in Facebook Places because none of their friends are on Foursquare.

As for Wong? Well, he just tweeted, "Why am I still using 4S to check-in?"