How will Foursquare compete with Facebook over time? As Facebook's search and mobile capabilities expand, isn't there high likelihood of direct product overlap?

Facebook has been copying foursquare for years, and people have been predicting our demise since the day they started doing it. In order to compete we'll do what we've always done, continue to out innovate everyone else. At foursquare we like to say that, on our best days, we're inventing the future.  That's a hard thing to do so it means we aren't following a straight line path of success from here to there.  There will be stumbles and missteps but the big idea that people will increasingly use software to navigate and get the most out of the world around them is a powerful one and we have the best equipped team to invent what exactly that software looks like.

To play devil's advocate (don't get me wrong, I love foursquare and use it frequently, and think it's improving all the time), there's a pretty feasible scenario where Facebook takes over this market over the next 3-5 years. foursquare may have had more vision in this market and taken the early lead, but Facebook has much larger resources:  - FB: $10B in cash vs. fsq $70m raised, less 1 year of burn - maybe $40-50m left?  - FB: $4B revenue vs. fsq $? - presumably single digit or low double digit millions  - FB: 4,000 employees vs. fsq 100-150 employees?  - FB: 1B MAU, incl. 543m MAU on mobile vs. fsq. 4m MAU per appdata Once Facebook gets focused, they will become a formidable competitor to say the least. Until recently, Facebook has primarily focused on enhancing and monetizing its web platform. However, with Facebook's renewed focus on mobile in light of the ongoing shift of user activity to the mobile platform, one might naturally expect Facebook to begin to focus more on location based services. Ultimately, location based search and recommendations will be an important source of advertising dollars on mobile and with Facebook looking for revenues and margin to justify its IPO valuation, I'd be surprised if they just ceded this market to a smaller competitor. Success in location-based services may not be just about out-innovating competitors, but about providing the most utility to users and partners. A player providing the required functionality (not necessarily the best) with the largest user base may prove more attractive to vendors and partners because of the distribution potential. With Facebook's MAU, the network effects ultimately work in their favor should they choose to focus on this market. foursquare is in a vulnerable position, dependent on several large platforms - Apple/iOS, Google/Android, and Facebook. There's an upside scenario where they do out-innovate everyone else on functionality, continue to strike attractive partnerships, drive user adoption, and become an indispensable, reliable source of relevant location-based information and offers to users. However, I suspect other players in the eco-system are likely to try to fill this gap too. My predicted outcome is an instagram-style deal where foursquare joins forces with Facebook because it makes more sense for both parties to work together. I suspect this won't result in huge upside to the $600m last-round valuation, however.