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03/12/2011 by

Facebook To Acquire Location Service Gowalla?

Facebook has acquired location sharing service Gowalla for an undisclosed sum, according to a source close to Gowalla, CNNMoney stated on 2 December. Facebook declined to comment on the deal, but we think the battle for SoLoMo between Facebook and Google has really started.

Most of Gowalla’s employees, including founder Josh Williams, would move to Facebook’s offices in Palo Alto.

There the team will work on Facebook’s Timeline feature, which launched at this year’s F8 conference and is gradually rolling out to Facebook’s 800 million members.

Gowalla is an Austin-based company that launched as a location-sharing service back in 2009. But it never got the same sort of traction that New York-based rival Foursquare saw.

On 22 August 2011 we wrote this article: Will Facebook kill eBuddy and Foursquare?

Well both eBuddy and Foursquare are still alive, but with the Gowalla acquisition Facebook definitely seems to want to claim its location-based future.

Today, we can see that the Gowalla app has 10,000 daily active users connected to Facebook against Foursquare’s 560,000 daily actives.

Facebook also has its location product Places, which it changed a few months ago to scrap the check-in feed from its mobile platform.

Instead, Facebook users must add a city location or tag a specific Place in their Wall or Timeline posts.

Gowalla pivoted earlier this year too, changing its check in-centric app to one that is like a crowdsourced local and travel guide.

The company has raised around $10.4 million in two rounds of funding with investors including Kevin Rose, Chris Sacca, Jason Calacanis, Shervin Pishevar, Gary Vaynerchuk, Ron Conway along with venture firms like Greylock Partners, Shasta Ventures, Founders Fund and Floodgate.

Given the amount of money the company raised, Facebook would have had to pay somewhere around $30 million or so for investors to have made their money back.

On 14 December 2009, TechCrunch’s Michael Arrington already wrote this article: GoWalla Worth Nearly $30 Million After Financing – Time to make your move Facebook.

It seems that Facebook has listened to Mike, but a bit late if you ask me.

Given Gowalla’s lack of traction plus how aggressively Facebook’s valuation is priced in within private secondary markets, it’s unclear whether this deal would make investors whole.

If this was a pure talent acquisition, we would expect to see Facebook shutdown the standalone Gowalla app too.

Facebook did (not yet) buy location based company Foursquare. They bought Gowalla instead, but deny the acquisition for now.

Facebook scrapped its product called Places and might now use Gowalla for check-ins and to fuel its product Timeline.

So the bigger picture could be: expect to have your local check-ins back in your Facebook Timeline soon.

And since Google bought Zagat this year, Google is also working on GEO locations and trying to finally fuel its social search product.

My conclusion? Facebook is heavily investing in its SoLoMo proposition: Social + Local + Mobile. And so is Google.

Interesting to see who will win the domain Local Search in the near future.

Peer learning’s:
We would love to learn from discussions with our peers. So please tell us in the comments below where you see Facebook or Google go in the domain SoLoMo…

Sources: Inside Facebook, CNNMoney, Tech Crunch and ViralBlog.


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