Just hours after announcing its new CEO, Microsoft released a bit of other news today: The Redmond giant has invested $15 million into the mobile location-based app Foursquare. Additionally, Microsoft will be licensing Foursquare’s places database for use in Microsoft’s products and services.
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The investment comes after a $35 million round Foursquare announced last December, which valued the company at about $650 million. This technically makes Microsoft’s new stake in the company part of Foursquare’s Series D round.
The investment is obviously no small deal – but neither is the location data Microsoft now has access to, which includes a history of 60,000,000 entries and 5,000,000,000 check-ins from 45 million users. In a blog post, Foursquare says that “In the near future, when you use Microsoft devices powered by the Windows and Windows Phone operating systems and products like Bing, places will be enhanced by Foursquare – to provide contextually-aware experiences and the best recommendations of any service in the world.”
Of course, just like targeted and contextual advertising, many users may actually find these “contextually-aware experiences” creepy instead. With the integration of Foursquare data, Microsoft may now be able to alert users with a notification similar to Foursquare’s real-time recommendations feature, which can deliver ideas for users to do when exploring a new neighborhood based on their personal tastes and location. That said, Foursquare CEO Dennis Crowley is clear that Microsoft and Foursquare have to figure out how to use the data in new ways. As he told Fast Company, “There is no API for that [yet],” Crowley says. “So we’ll be doing a lot of interesting, special stuff with Microsoft. They see [our data] as something that can really fuel a lot of their product roadmap.”
Many consumers are already turned off by contextual promotions and advertising on both the web and mobile. However, if Microsoft can leverage Foursquare data in a way that seamlessly integrates with the Windows phone experience in a way that is cool – and not creepy – this investment may just be the shift that the mobile advertising industry – and Microsoft – has desperately needed.