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Bloomberg reported earlier today that Foursquare is in negotiations “with multiple large technology companies” in an effort to secure a strategic investment, then it followed up with this report identifying Microsoft as a particularly interested party. Talks with Microsoft are “at an advanced stage,” according to Bloomberg, although any deal is far from certain.
My colleague Lauren Hockenson rightly noted that has struggled recently to make its revenue goals and to convince investors that it is building a viable business. But as Alex Wilhelm of TechCrunch writes in this insightful post, buying a stake in Foursquare could be a wise move for Microsoft both offensively and defensively. Microsoft already uses Foursquare data for Bing, and securing a chunk would help protect that partnership should another party scoop up Foursquare. More importantly, Foursquare’s user data about restaurants, retail outlets and other consumer-facing businesses could be used to boost Bing’s value in a big way. Foursquare might be doomed if it can’t cement a deal with a deep-pocketed partner that benefits both parties. Microsoft seems like a pretty good fit.