Microsoft is to invest $15m in social location app firm Foursquare and will gain access to much of the service's unique customer and business data to improve its own services.
In an interview with the Financial Times (FT), Foursquare's head of business development Holger Luedorf revealed that the deal would see his firm and Microsoft working together "very closely and strategically". He said the data provided by Foursquare would allow Microsoft to "augment" its devices and services in the coming years.
Foursquare boasts 45 million users, which is dwarfed by Twitter's 232 million and Facebook's 1.23 billion. But the company holds a large amount of bespoke data, which will be of value to technology businesses. The data includes details of five billion check-ins into 1.6 million locations around the world.
Location-based data is seen as increasingly valuable as consumers migrate towards mobile applications for social interactions and shopping. Having data on the consumer movement is a valuable resource to advertisers and advertising platforms looking to target users with adverts for local businesses.
Jon Tinter, Microsoft's online audience business group general manager, told the FT that the Fourquare deal would allow the company to create a "richer experience" for its users. "We really believe in and are spending a lot of time investing in what we could characterise as contextually aware services," he said.
"Location is probably one of the most important contexts that you can use in creating search experiences. For understanding where people are physically on a map, associating information about that place to a location, Foursquare has a very rich dataset."
Microsoft's $15m investment sits on top of a further $35m Foursquare gained in its most recent round of funding. As Microsoft enters a new era with Satya Nadella as its new CEO, its mobile services strategy – which has fallen behind the rest of the industry in recent years – will be under particular scrutiny.
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