Foursquare Finds Itself a Microsoft Deal: Investment Plus a Commercial Pact
One other bit of Microsoft news today: Satya Nadella’s company has struck a licensing deal with Foursquare and has also invested in the local/mobile/search company.
Microsoft’s $15 million investment is technically part of Foursquare’s Series D round, so you can add that number to the $35 million the company announced late last year.
What could be more important for Foursquare is the commercial deal, which means Microsoft will integrate Foursquare data into its Bing search engine, as well as its Windows Mobile apps and services.
Microsoft and Foursquare aren’t spelling out exactly what those linkups will mean, but insist that they will mean more than offering up Foursquare listings in search results. And they say we should start to see some of the collaborations “very soon.”
The deal has a couple benefits for Foursquare, which is still trying to make good on the hope and promise it generated in its early startup years:
- Cash: This is a four-year deal, and while Microsoft and Foursquare won’t say how much money it’s worth, a person familiar with the deal puts it in the same ballpark as the equity investment. So figure $15 million, give or take. That’s not a windfall, but for a company that’s still in the early days of revenue generation, it’s nothing to sneeze at.
- Proof of concept: Foursquare CEO Dennis Crowley has been arguing for a while that mobile phones are just getting to the point where they can do really interesting stuff with the local data Foursquare has accumulated. Now, in theory, he should be able to show that off. And because the deal is non-exclusive, Crowley can theoretically entice other big mobile players — Apple would be nice, right? — to do something similar.
- Branding: Foursquare still refuses to say how many people are using the service (Crowley says it has 45 million registered users, up from 33 million last year, but without an active user number, that doesn’t mean much). But it would certainly like more. The fact that Bing and Windows mobile users will now see “Foursquare” a lot more can’t hurt.