Will Foursquare become a niche site because of Facebook's aggressive entry into the location space, providing the same basic checkin function?

Summary: Foursquare would need to get out of "where are your friends" territory, and get into major territories that Facebook would not touch, or would do poorly in - new people discovery (dating, etc), shopping discovery, event discovery (parties, nightclubs) etc. The current pundit discussions of "Will Facebook kill Foursquare" is very simplistic and misses the point. The better question is "What are Foursquare's potential outcomes, now that FB has an same core action that users do on Foursquare?" Personally, I feel that it is now much harder for Foursquare to become a mainstream social site, aka Facebook/Twitter. Most people (like my girlfriend) was likely to get onto 4sq only because they could see/broadcast where they are to their friends. Now that they can do so on Facebook, that is one major incentive gone. There are a few ways Foursquare can become a major site in its own right, leveraging on Facebook's entry to the best of their ability. Here are a few examples: People discovery: Who can i meet nearby for dating, activities, etc? How can check-in be more than broadcasting location, but also broadcasting intent? Shopping discovery: Think Groupon, but much more personalized around who you are, and where you are. Their recent traction with merchants set them up nicely for that Event discovery: What is the coolest party nearby? Not where my friends are, where the coolest people are Each of these are huge areas in their own right that I do not foresee Facebook going into at the time being. Even if FB does it, they are likely to do it poorly, since they are super -optimized for the friend graph, not for discovery. I am super optimistic about Foursquare - I think they need to find the area to focus on that represents a huge market, but not trampling on Facebook territory

There are several reasons why Foursquare can still grow and why, in my opinion, this is a false question. In the last week I have read several posts about this issue and they all start with the wrong premise: That 500,000 million users will soon be using Places. This couldn't be more wrong. There are a lot of Facebook users that take privacy very seriously and they will immediately block Facebook Places but, to be able to get on the location trend they will probably chose Foursquare or to do this. When Facebook places is available in Europe don't expect to have all users jumping on the Places bandwagon because they take privacy more seriously.  (recently a Portuguese court had a ruling that made Google Street View illegal in the country due to privacy concerns). Also, Facebook is a closed social space and   will not change that and there is no added value for the user in using it (but the hype) unlike what happens with Foursquare that should take this opportunity to be more aggressive in what comes to their badge and «rewards» system, i.e., settling more agreements that they have with commercial outlets to reward «locals», «mayors» and implement more badges. Foursquare has always been a niche site and that will not change with    but, in my understanding, it can actually grow on top of the buzz being generated.

When Facebook launched “Places” i was curious to give it a shot. And after just a few days, I think it’s going to be a viable competitor and will keep many mainstream users from ever using Foursquare. Here’s why: There are three reasons why people use Foursquare Socially. To tell their friends where they are so they can join them. As a game. To become “mayor” of a place and to check in more than other people MyWare. To log where in the world you’ve been The first reason – to connect with your friends – is the most powerful and is the reason most people use a service like this. The main issue with Foursquare is that not many of their friends are on it, so this didn’t happen for most. It only worked this way for power users and early adopters who have other power users and early adopters as friends (people like me). This is where FB Places shine. The first day of using it, i had more friends on it than on Foursquare and it was immediately more useful for me. I could actually see where many of my friends were. Foursquare never did this well. The second reason – to play as a game and to become a mayor – doesn’t work for FB Places. There is no game in Facebook. It’s just to connect. I can see rewards happening in the future the same way that some restaurants or shops post messages on their FB pages for free coffee or cupcakes. I actually do miss this on FB. I found myself not checking into a place this weekend for a second time because i asked myself, “what’s the point?” I knew it would annoy my friends and i was leaving soon anyway. I checked on Foursquare but not FB. The third reason will never happen on Facebook but will on Foursquare. You can see my stats page here. It’s great to see and view all the places i’ve been. Will most users like this? Not at all. I’m a rare breed in my love of tracking myself. To sum up, i really think FB Places is going to crush it. Despite Friday being the biggest day in Foursquare history and their claim that the rising tide will raise all ships, I think that unless Foursquare can continue to out-innovate Facebook, I think FB will leave Foursquare behind in the dust.

Many things could happen: Buyout, partial or complete, by the leader or a bigger player trying to compete (Google, Microsoft); Explosion due to internal tensions; (the two previous happened to the same team with DodgeBall, so I hope they won't hate me for saying this can happen); Offering a service to companies (franchise, ad agency) not unlike GeoSimple distinct from the leader's; Holding another market (Urban Cool Dudes, vs. Soccer Moms) that has completely distinct conventions, valuation, business model; something not seen before. Even by knowing the team very well, it would be hard to tell the future—and I never met them. I can tell you that, like Gowalla, they have an acute sense of the subtle social rules that make a service work and a deep understanding of conventions evolving with usage and their user basis, so they won't explode or disappear like MySpace, not unless they are bought out and handed to a clueless PHB.

Corporate adoption of location based solutions will be the answer to who will succeed in this space and the company with the most robust and flexible API to enable applications to be built around the "check-in" functionality will win.  I expect to see the ability to "auto-check-in" to locations becoming standard functionality... For example always check me in to certain retail locations (and potentially get special rewards for doing so) or obtain free content when checking into a music venue etc