Foursquare reaches 20 million users but doubts cast on chance of success

Foursquare, the geo-location social network, has announced that it has hit two billion check-ins and amassed 20 million users since its launch two years ago.

The growth of Foursquare's user base is clearly accelerating, as last June the site had just 10 million users.

However, while Foursquare has displayed strong growth in recent months, there remain doubts about how far the social network can go.

Foursquare allows users to 'check in' to locations when they arrive, such as museums, restaurants and shops, and let their contacts know where they are via the site and on other social sites such as Facebook and Twitter.

The frequency with which they check in gives them points and the ability to become the 'Mayor' of a certain location, which retailers can use to offer their customers discounts.

Foursquare also offers retailers information on customers through a dashboard feature that allows them to track users of the social network.

When compared to the first two years of existence of some of the world's most popular social networks, Foursquare's appears to be doing well.

For example, in June 2008, Twitter reported it had reached two million users, two years after its launch. Meanwhile Facebook had been in business for two years in December 2006 and had only 12 million users.

However, it is difficult to compare growth rates when Foursquare was launched years after Facebook and Twitter, at a time when social networking had already become ingrained in internet users' philosophy.

And according to Quocirca analyst Clive Longbottom, Foursquare still lacks in functionality, especially when compared to the likes of Facebook.

The points system remains relatively underused and so is irrelevant to many users, he explained.

Meanwhile the social network is facing increased competition from Facebook, which is incorporating its own check-in style features in a bid to help firms try to engage with customers online.

"It's definitely impressive what Foursquare has managed to do, and how far its come, but it still seems relatively pointless," said Longbottom, talking to V3.

"I consider Foursquare to be a bit of something and nothing, even though other people don't think like that, and swear by the service it offers."

"Facebook not only offers businesses similar capabilities to Foursquare but also eclipses what Foursquare is capable of, by offering businesses further insight into their customers' interests."

Longbottom compared Foursquare to MySpace and Bebo, which have both faded away after initial early promise.

"Like those earlier social networks, Foursquare has caused a lot of flutter, but this is unlikely to last. It may go through an equity ownership as time goes on."

"I don't think Google, Facebook or Twitter will be interested in it, as there's nothing it can offer them - apart from 20 million users."