As it does almost every year, TED has gotten people excited about the next big thing – and this year that next big thing is augmented reality. Well, actually it’s more likely to be the big thing in 2011 or maybe even 2012 (we would humbly suggest that check-ins are the big thing now). Nevertheless, when augmented reality finally comes to fruition in scale, more than any kind of apps, social location services will be propelled to new heights.

There are many reasons why this will be the case. First of all, as we have mentioned before, checking in will be a much more compelling experience once those check-ins are verified (and there will be less cheating going on for sure), preferably by interacting with the surrounding environment. Although this can be accomplished through other ways than high bandwidth augmented reality, other means will be much less compelling than this new medium, which means they won’t win out over augmented reality.

In Person over Remote

Secondly, while it will be possible to sit at a laptop to view locations anywhere (indoors and outdoors) with augmented layers, this medium really comes into its own when it enhances the user’s interactions within their immediate vicinity. So while playing with augmented layers over Street View in Beijing from a coffee shop in Berlin will be fun, walking around Beijing with a augmented reality capable phone will be more beneficial, immediate and most importantly social for the user. Walking in to the Forbidden City with your phone, checking in, and then searching the palace for Foursquare badges (or maybe even seeing other users “wearing” their badges), is going to be much more fun than sitting thousands or even a couple of miles away and trying to do something similar from a laptop. Other kinds of augmented reality could also be activated when a user is physically present – wouldn’t you like to shake the hand of the emperor?

Fun over Utility

Which leads us into another reason augmented reality and location services are a perfect fit. Many of the currently popular social location apps are popular because they are fun – utility is at best right now a side effect. And while there will be many utilitarian uses of augmented reality, first and foremost people will want to have fun with it, therefore gravitating to those apps that offer gaming elements over more serious uses. As we mentioned above, a clear example would be Easter egg hunting for badges and other virtual goods (which is basically what Gowalla is in an un-augmented app world). Gaming and virtual goods have proven to be tremendous business models and it will come as no surprise to us if the first wave of augmented apps are mainly games. Of course, in this case, Foursquare and Gowalla may have to compete with Zynga and Tencent and others, but even though those giants have the edge in online gaming and virtual goods, location-savvy startups should be able to level the playing field with better location-aware apps.

Check-in activated advertising

On the topic of revenue (such a pesky topic, isn’t it?), the inevitable revival of display advertising in augmented reality another major source of income for location apps. Step into a baseball park, check-in, and watch signs pop up to give you discounts on hot dogs, beer and peanuts. It won’t really matter if those signs are already there in real life – the augmented ones will have high conversion rates so they will be there (possibly even overlaying the actual physical sign). Virtual signage that only appears when a user checks in will continue to drive the desire to check-in (whether manually or through auto verification), although we fully expect that there will be plenty of augmented signage just hanging in the air whether users check-in or not. That said, current location apps that continue to build relationships with venues should have a step up over newer entrants on securing augmented advertising deals.

Are they ready?

Finally, we wonder whether or not current location apps are ready or willing to tackle augmented reality functionality. Of course, augmented reality will need an ecosystem to truly thrive, but some of the examples we gave above, such as hunting for prizes or viewing other users’ badges can be completely within the control of the apps themselves. Perhaps this functionality will not come from the startups themselves, but through developers using APIs. Regardless of where it comes from, however, apps that combine what’s great about location apps with the seemingly unlimited potential of augmented reality, should do very well indeed.

As millions of iPhone/iPod Touch and soon to be iPad users know, Apple’s SDK’s biggest drawback is single-tasking (i.e. no background processes). As the dominant mobile platform (we don’t want to debate “best” or “most used” – Apple’s SDK is the first mobile platform almost all developers develop their apps for first, so it is dominant), many social location services have built their apps to work in a single-tasking environment, first and foremost. To take this a step further, an argument could be made that the whole check-in craze is the bastard child of the limitations of Apple’s SDK. Would this space have evolved if Apple’s SDK supported multi-tasking? Well, we certainly have made the case for checking in as a concept that stands on its own merits, and Foursquare and Gowalla and others have made great progress in utilizing the focus of single-tasking to make relatively straightforward apps, but still, we would argue that the intrinsic value of check-ins aside, these apps are not all that they could be.

Back in September of last year, Loopt announced that they had hacked together a way to go around the background process limitation. Loopt made a complex agreement with “many partners” (including presumedly AT&T) to use cell tower triangulation to approximate a user’s location to update that user’s Loopt location (for a monthly fee). Here’s what I wrote at the time in the comment section of MG Siegler’s TechCrunch article covering this:

“Here’s my take. As far as a good way to create a revenue stream for themselves and AT&T, this is a smart move. However, as many commenters have already pointed out, cell tower triangulation really doesn’t make this all that special. Best case scenario is that I have some idea where my friends are in a city/area but I will have not have any idea what they are up to unless they check in somewhere (this is somewhat true even for GPS as street address doesn’t necessarily tell me what my friends are up to, but obviously it’s much more precise). When an app/phone can push and allow me to verify (or best case, do the verifying itself) where I am and what I’m up to, then we’ll see a breakthrough in this space.”

As I said then, I don’t think that this is very big news – cell tower triangulation has been around for awhile, and who wants to pay a monthly fee when their phone already has GPS and they’re paying a lot of money for 3G connectivity? Right, a very limited number of people. As I said in the comment, even if Apple allowed background processes that connected to the iPhone’s / iPad’s GPS (we still want GPS for the iPod Touch allow with that pesky camera), that still wouldn’t confirm to my friends what I’m up to – they could probably take a pretty good guess, but verification would still be needed in order to be sure – whether I, the user, do it myself or some other part of the app does it for me. This last part is what we see as the killer approach, and here is why…

Social location applications will truly come into their own when the apps themselves interact with the environment around the user’s physical location. What do we mean by this? Here’s an example – a user walks into a shopping mall and the app running in the background (again, running in a multi-tasking environment, i.e. not on Apple’s SDK right now, but Android, WebOS, whatever) and utilizing GPS pushes out a map of the mall with all of the user’s friends that are currently in the mall and shows them moving around the floorplan, and perhaps highlights what shops are having sales, and could even verify your correct location by cross-referencing it with other friends that have already checked into a location - all without the user having do initiate anything. Understand, this is separate from checking in – this is having the app push helpful info to the user without having them reveal their location to their friends or the world – the check-in would work as an endorsement (as we’ve mentioned before in this blog) but it wouldn’t be necessary to get something out of the app (i.e. you don’t get to be the mayor of anywhere on Foursquare unless you check-in). We could offer dozens of other examples, but we’ll let your imagination run wild instead.

So back to Apple. As the dominant mobile platform, Apple’s current SDK is severely stunting the growth of social location apps, both for developers and in how fast the average user adopts these kinds of apps (i.e. the average user needs to see more value come out of location apps). If the push for better and more useful location apps continues, developers will be faced with a very hard decision – to stay with Apple in the hope that they can gain more users and switch them over to better features if/when Apple finally decides to allow background processes, or opt to stay on the bleeding edge and build innovative features/apps on other platforms such as Android.

Unless you’ve been on Neptune the last few weeks (you’ll need to show us your check-ins to prove it), you’re almost assuredly aware of the iPad, Apple’s supersized iPod Touch. Assuming that Apple will sell millions of these things (regardless of whether people need them or not), and other companies also release portable, multi-touch tablets throughout the course of the year (Lenovo for one has our mouths watering with their U1 Hybrid, and the Google Chrome OS tablet rumors are starting to heat up), tablet computing will be disruptive to a number of online verticals, including we believe, the location space. Here are a few reasons why.

More mobility

If tablets can offer a fair amount of computing power (we’re not sure this is the case with the iPad) they are likely to replace laptops/netbooks when people are away from home/office. Why? Frankly, because they are cooler and lighter. We (Location Meme) accept it as human that people are vain. People are going to want to be seen with their tablet, which means that they will bring it with them when the go out (esp during the day – we doubt many people will be bringing their tablets to nightclubs). Further assuming that given the choice between interacting with the much large screened tablet over their cellphones, people will use their tablets to check-in at a location, which alone will change the location space. But more to the point, when they do check-in, tablets will offer…

Better Interaction With a Location

Let’s assume for one minute that Apple comes to its senses and adds a camera to the iPad (and Steve Jobs willing the iPod Touch). We all know that augmented reality (AR) apps are just getting going, and it is a no-brainer to conceive that tablets are the true future of AR. Crowd a lot of augmented info onto a 3.5″ screen and things get cluttered fast – change that form factor to a 10″ screen and things get a lot clearer and easier to use (not to say that good AR apps can’t exist on smartphones too). There are too many application ideas to list here, but imagine stepping into an IKEA with your tablet, checking in, then then using the tablet to do anything from get directions around the store, to pointing your camera at a couch you like and overlaying different fabric colors onto it, to – yes, the holy grail – purchasing and checking out right on your tablet.

While the above reasons are important, the most important reason that tablets are going to change the location space for companies such as Foursquare, Gowalla, Google and Loopt is…

Tablets will make us more social on the go

Please understand, we are not trying to hype tablets in this post. We see the tablet space as an evolution not a revolution (the iPhone was a revolution) – in fact, as many pundits have noted, tablets have been around for awhile already. But the 2010 tablets (the Twenty Ten Tablets? TTT?) seem to us to be an evolutionary step in computing, especially mobile computing, and every such step in this direction has made us more social on the go. Tablets will allow users to see great looking maps of where their friends and interesting places are, as well as deeply interact with location apps. AR will explode on tablets (once those pesky cameras are installed), and AR is all about location. Finally, and most importantly, tablets will allow us to bring more of the web with us on the go. Apps are great, the more easy and usable access we have to the web as a whole, the more we can truly interact with the millions of websites that don’t have apps, and this above all else, is where tablets are going to change the location space.

Twitter’s new Local Trends function on Twitter.com is basically meaningless. It’s full of spam (just as the global Trending Topics is) and really isn’t all that interesting because: 1. lots of the same trends go across the limited number of places Twitter is offering right now; and 2. there is no context for the user other than millions of other people in their city or country tweeting. We held off on writing about Local Trends until today because until Tuesday only about 1% of Twitter users had Local Trends enabled (not sure if it is 100% now, but lots of people now have it enabled) and second, the API function related to Local Trends wasn’t turned on either until the last 24 hours or so. As with most things in the Twitterverse, the API is where it’s at, and now Local Trends can really get interesting.

Twitter’s API team turned on two calls – Local Trends/available and Local Trends/location. While Twitter is still apparently building out the places that they can offer trends around, this API call will allow developers to go beyond geotagging of tweets (which will discuss below) and map out trends and search parameters inside of their applications. One interesting line in the API documentation says that Local Trends are “an array of “locations” that encode the location’s WOEID and some other human-readable information such as a canonical name and country the location belongs in.” We read that as saying that Twitter is using a mix of ways to determine a user and a tweet’s location, and not just relying on lat/long. Obviously, there could be many uses for this.

One use that comes to mind is a “breaking news” application that could push out notifications to users when a local topic starts to trend. Another could be a map-base app that shows heatmaps of trends, for instance, which trends are hot or not in different areas of a state. Check-in apps (i.e. Foursquare, Gowalla, Yelp) could also use this data to compare check-ins across a trend – so for instance, on New Year’s Eve, users could drill down on the “Happy New Year!” trending topic to see where people mentioning that trend in their city are checking in, which could be a good indicator of where the best party spots are. The possibilities are not limitless, but there are a lot of ways this data can be used.

That said, there are three major drawbacks to what is in place right now. First of all, spam is a huge issue that right now often accounts for 50% or more of trending topics on Twitter, and we’ve noticed the same thing happening with Local Trends. Twitter needs to figure this out, and needs to figure it out fast, or the entire concept of trends is going to be worthless. Secondly, Twitter’s attempt to get users to geotag their tweets has been to all reports nearly worthless – almost no one is turning this option on, so the accuracy of Local Trends has to be called into question we think. Finally, while Local Trends (if accurate) is interesting in a discovery kind of way, it really isn’t all that relavant to the user because right now there are no filters in place to see what’s trending locally among your local followers or people you follow. Foursquare quickly figured this out when they added friend leaderboards in addition to city mayorships soon after they launched last year, and major apps that figure out this kind of filtering will have a hand up on their competitors. We will be closely monitoring which apps integrate Local Trends, and more importantly, what they do with this new feature.

The social location landscape changed dramatically this weekend.

Yelp, the 800 pound gorilla of local social media, revamped its popular iPhone app in order to let users check in to locations.

So how will this affect social location services like Foursquare and Gowalla?

I think it’s a devastating development for them, a brutal punch in the gut.  It’s not a surprise that Yelp should choose to implement check-ins – indeed, check-ins are a perfect extension of local business reviews.  In some ways a check-in IS a review – an implicit endorsement of a local business, in the same way that sales data is a vote of confidence for a product (see Blippy).  And it’s much easier to check-in to a venue from a mobile phone than it is to write a review of that venue.

But what is a surprise is how fast Yelp moved.  To roll out as polished a product as their most recent iPhone release, they had to have begun development months ago.  And the fact that they chose to risk totally revamping a highly successful and popular iPhone app, as opposed to building a separate app, shows just how big Yelp is betting on check-ins.

In the TechCrunch article covering this news, MG Siegler suggests that this development doesn’t necessarily mean lights out for Gowalla and Foursquare:

“No one is quite sure how well the concept of check-ing-in will work when tacked on to an existing social network.”

This is a reasonable point.  Yelp’s social graph doesn’t reflect real life as accurately as say Facebook’s.  And will people share their location with people who are not their friends in real life?

So far, the answer would appear to be a resounding yes.  A quick look on Twitter search shows that people are already using this feature in droves.

A glimpse at the last two hours of data on Twitter search show about 60 Yelp check-ins – about one every two minutes.  Foursquare is claiming a check-in every second.

But the Yelp data is an enormously understated snapshot of the people actually using the feature – it only includes people that A) that have Twitter accounts; B) people who have synced those Twitter accounts to Yelp; C) people that chose to push the check-in to Twitter (the default is NOT to do this); and D) people that have downloaded the Yelp app update.

My guess is that just 24 hours after pushing this update, Yelp is already may soon be closing in on the check-in volume of Foursquare.  And this is before most Yelp users are even aware of the feature.  There has been no Yelp newsletter sent out announcing the feature, and the only coverage so far seems to be on the tech blogs.  What will Yelp’s check-in volume look like when all 1.25M of its mobile users are aware of the feature?

Besides mapping a lot more connections between Yelp users and venues, this new feature is almost certainly going to drive Yelp a bunch more traffic via its Twitter and Facebook integration.  Expect to see Yelp’s traffic get a nice bounce.

But back to Foursquare and Gowalla.  What can they do to avoid being brute forced out of existence?

Here are a couple of options:

- Go international.  How do you say Mayor in Chinese?
– Push the gameplay angle.  Neither Yelp nor Google seem to have any interest in the game dynamics piece of the puzzle.
– Find a niche and focus all distribution, gameplay, and design on that niche.  check-ins for clubbers.  check-ins for coffee drinkers.  A white label check-in app.

I don’t think I’m exaggerating to say that a change in direction may be required.

And as an aside, there is a fascinating food chain battle going on.  Google, who nearly acquired Yelp a few weeks ago, is putting tremendous pressure on Yelp via it’s new “near me now” feature.  Yelp has pivoted swiftly and has quickly added social location to its own service, in turn putting pressure on Gowalla and Foursquare.  How will these tiny startups respond?

So there you have it.  Yelp has moved quickly and decisively into the social location space, and there is almost certainly a lot of soul searching going on in Austin and New York.

Even more than Facebook or Twitter, I saw Yelp as the single most dangerous competitor in the social location space.  And now they’re here, faster than most people expected.  And everybody else is going to have adjust.

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Friending and friend discovery are core concepts (maybe the core concepts) of social media. There are really three main friending choices for social media sites: follow only (i.e. RSS); friend request approval (i.e. Facebook); or anyone can follow anyone, no reciprocal follow required (Twitter model). As social location services evolve, how friending takes place (and is handled by app providers) is going to greatly determine the popularity of location services in our opinion.

The why is quite simple – people generally only want to share their location with people they trust. Scratch that – with people they really trust. Not everyone is that way for sure (and we believe that more people will open up to the idea as time goes on), but right now, the general populace (read: your mom) doesn’t like the idea of sharing location with strangers (or even casual acquaintances) one bit. You could probably convince your mom that its ok to share your location with your BFFs, but beyond that, it’s rough going. Of course, adults don’t have to ask their mom to do anything (or shouldn’t have to), but adults get creeped out like moms do (and some adults are of course moms). That said, if you just become friends on location based services with the people you really trust, chances are your friend list won’t be too long (unless you’re a really really trusting person, in which case this post might not be for you). Let’s say for argument sake that you have 50 friends/relatives that you really trust. Will you only share your location with those 50 friends? How about the other 200 people you’re friends with on Facebook? Or the few hundred people that follow you on Twitter? Do you trust people you’ve probably never even heard of (which makes up the vast majority of most people’s Twitter followers) with your exact present location as well as your check-ins over time?

This is of course one of the main problems/concerns over social location sharing. Privacy has many levels – for instance, you may trust someone explicitly but not want to share your every movement with them – so we could go very deep into many aspects of privacy in this post, but we won’t (we’ll break it up for later posts). What we want to focus on here is how social location sharing services may deal with friending and at what point does it become spam and/or threatening?

We will say this right off the bat – privacy and friending procedures should be at the very top of the priority list for social location providers. Numero uno without a doubt. If you are running one of these services, figure this out, work with your users and innovate and you will do well. Don’t, and you’ll be left behind, as tepid users go somewhere just as fun, but safer.

So let’s break this down into four “friend” categories that we see: real friends; established contacts on other social media services (which can include your real friends); strangers; and brands/businesses.

Real friends

The main issue here is not whether or not to share your location with your real friends – which we will assume that users will do for the most part – but what privacy settings are available as filters. As we mentioned above, this is a whole post in itself, so we’ll reserve this discussion for a later post.

Established social media contacts

Many social media services – including location sharing ones – rely on data portability technologies (Facebook Connect, OpenID, OpenAuth, etc.) and email contact lists to import and invite ready-made contacts into their service. Users can choose which (if any) of their social contacts to import and invite, and a fair number of new users take advantage of this. This is standard and accepted fare in social media. However, when inviting someone to a location sharing service, this may not be so cut and dry, as users will probably have to think hard about whether sharing their location with these persons is what they want to do (especially when the only sharing option is “share” – i.e. precise privacy options are not in place). There is also the other side of the coin here, and that is the invited user accepting the invitation to share his or her location. Does the service require that sharing be mutual or can it be one-way (i.e. following like Twitter)? Regardless, location services will continue prompt users to mass invite their contacts, which will often include their real friends. While some users will receive requests from people they don’t recognize, there is at least some kind of previous connection between the two users, unlike the next two kinds of “friending”…

Strangers

Location sharing services and strangers – try freaking out your mom more. If you join a location sharing service, however, eventually strangers are going to request to become friends with you. Social media isn’t just about communicating with those you know but also discovering new people, i.e. strangers. With location based services this goes a step further, because unlike other social media, location is based in the real world, so often discovery is centered around location, which means that a stranger could be requesting you as a friend while standing right next to you. Or from somewhere on the same block. Or the same city. We’re not trying to creep anyone out – this is just the reality of location sharing services. This is amplified by the fact that a number of providers are adding social features that are focused around a specific location. This means, for example, that everyone that checks into a bar will be able to know who else has checked into the same bar with them – whether they’ve friended them previously or not. It also may mean that if you are in the same bar, people may be able to message you without being your friend. So how do providers avoid any of this becoming too creepy (if not worse)? We would suggest that social location sharing services need to make more of an effort to include a buffer in this process, perhaps a “Kevin Bacon” type of referral system that tells a user “this person is friends of Bob W. who is friends with Jim K.” etc (which is in a way how LinkedIn works, although LinkedIn’s model is way to cumbersome for fast-moving location services). Whether providers adopt this approach or other strategies, they need to create some kind of a creepiness buffer or they may possibly face a strong backlash from their users and potential users.

Brands/Businesses

The final group of “friends” are entities that are trying to sell you something, whether a Fortune 500 brand, a local convenience store or anything in between. Getting this right will be both very tricky and very important to any location service’s business model. It will be very tricky because unlike other social media sites that can just push these kinds of friending and messages aside (read: spam or ads pushed to the side of the website), with location enabled apps these “friend” requests can be triggered by where the users themselves go. For example, if a user visits a car dealership and shares that location, doesn’t that give the car dealership ownership and the car manufacturer an opening to invite you to be their “friend”? Certainly from the dealer’s and the manufacturer’s point of view. From a business model perspective, the location service provider in this case could charge both the dealer and the manufacturer a fee to have access to the user’s location. But what about the user? Just because they visited the dealership, does that mean they want to be “friends” with the dealer and/or the manufacturer? Some kind of coupon or advertisement may be acceptable to the user, but as a growing number of marketers know, the real benefits of social media result not from one off offers, but from long-lasting friend/fan/follower relationships with consumers. This has worked well with Facebook and Twitter – but in neither case is the user giving implicit permission to the brand/business to access their physical movements (Twitter now has optional geo-tagging of tweets, but we haven’t heard of any brand really using this to enhance the relationship with certain followers). But in a location sharing service, users sharing locations with brands would be implied after friending. This is not to say that there may not be some benefits to users that establish a “friend” relationship with brands, especially ones that have multiple physical locations (i.e. if a user is a friend with H&M, every time that user is with a certain distance of an H&M store, H&M could then send them offers). However, will this outweigh the uneasiness that users will feel with sharing their location data with not just one individual, but with an entire organization (i.e if a user shares their location with IBM, how many of IBM’s 400,000 employees now have access to that user’s location data?). Again, it will be a very tricky (yet business critical) issue for providers, and it will be interesting to see what users are willing to not only accept, but will also demand back from brands for sharing their location. As with other concerns we’ve pointed out here, we predict that solutions will need to revolve around privacy and promotional rules in conjunction with nuanced user settings.

Conclusion

Friending within social location sharing services will probably not follow the same patterns as we have seen in other social media services, because of the inherent physicality of this new type of social media. Social location sharing services will need to pay close attention to user feedback and adjust and innovate with the understanding that they are breaking new ground in how friending occurs.

This just in from the Google Mobile Blog – they have turned on a “Near Me Now” link if you visit google.com with your Android or iPhone browser.  Clicking the “Near Me Now” link displays a menu of business types: Restaurants, Coffee Shops, Bars, ATMs, etc.  Clicking on one of the categories then shows you a list of of businesses close to you.

Here are some screenshots from my iPhone:

A couple of things stand out to me here:

• The business filters are nicely done.  There’s an iPhone app called AroundMe that does a nice job with these sorts of venue filters, but they are the only location service that I can think of using this approach.  Until now.  If you’ve ever tried to use Foursquare in Manhattan, you will realize why filters can be helpful.
• Google’s local business data is very, very good, and very accurate.  Their review content, though not up to Yelp standards, is growing slowly and steadily.

Any time that Big G decides to add another link to Google.com, it’s worth stopping and taking notice.  With Yelp acquisition rumors, and those big giant plastic pins, and their favorite places barcode decals, and local business days in major cities, and now a new link on Google.com – it’s clear that Google sees local as a major battleground.

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Hello World! There’s a new data point emerging in social media that promises to change the way that web meets world. Location.

Services like Gowalla, Foursquare, Loopt, Google Latitude, Yelp, BrightKite, Flook, Stalqer, MyTown, Rummble, and many more are racing to integrate location to provide deeper, richer, and more social services than what were possible before.

“Simply put, location changes everything. This one input—our coordinates—has the potential to change all the outputs. Where we shop, who we talk to, what we read, what we search for, where we go—they all change once we merge location and the Web.”

- Mathew Honan, Wired Magazine

LocationMeme will be our best effort at tracking and analyzing the companies, trends, data, devices, and entrepreneurs that are shaping our location aware future.

Ready or not, the web is becoming location aware.  Thanks for joining us as we explore this emerging space.