Will Foursquare Be Facing Privacy Issues?

This is an interesting question Erik Sherman explores in a recent article. The whole point of the potential issue is the Foursquare Merchant Platform could lead to user tracking. That means finding out where users are and their habits, thereby allowing targeted ads, targeted services. What’s at risk is ever hallowed anonymity, a state that’s becoming rare in today’s oversaturated social networking environment.

Of course, while such speculation is too Facebook for comfort—itself a controversial topic—the implications could be damaging for Foursquare. While it already dominates the niche for locations-based experiences, with a good number of users living outside its New York stomping ground, Foursquare isn’t very big. To date it has less than 10 million active users, with a lot of space for growth waiting to be scaled. That means a user privacy problem could really tarnish Foursquare’s reputation as an exciting startup achieving great things.

The sticky part is the whole tracking issue and its attendant benefits for clients could prove a huge revenue stream. What to do? Sherman doesn’t offer any nuanced strategies, but he does provide useful. An example:

“The company’s plan is to help merchants recognize consumer behavior and then market more effectively to them. But Foursquare is a step beyond what other social networks do. Most provide behavioral targeting, but generally act as intermediaries to actually deliver the ad or offer.”

Via: BNet