Does Facebook-McDonalds Deal Signal Competition For Foursquare?


Facebook is widely believed to be developing geolocation features for its social networking site that will allow users to share their location with friends without having to type their whereabouts in status updates.

The capability, first reported in a story in The New York Times in March, also will let third-party developers build location-sharing into their Facebook applications.

And that’s exactly what’s up with the Facebook-McDonald’s deal, according to a story published on the AdvertisingAge Web site late last week. The story said that McDonald’s, through digital agency Tribal DDB in Chicago, is developing an application with Facebook that will allow users of the social networking site to check in at a McDonald’s restaurant and have a featured product appear in the post or receive coupons for McDonald’s products.

Facebook has some 450 million users and about 100 million of them update their status from mobile devices on a daily basis.

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The AdvertisingAge story said the negotiated deal is part of a bigger media-buy on Facebook by McDonald’s, which will be the first marketer to take advantage of Facebook’s new geolocation capabilities.

Facebook isn’t charging McDonald’s -- or other marketers -- to develop apps on its platform, The AdvertisingAge story said executives at other digital marketing companies are developing location-based marketing campaigns for retail clients to work with Facebook.

The AdvertisingAge story said that PepsiCo, Starbucks, Bravo and MTV have all experimented with marketing campaigns on Foursquare.

Facebook’s expansion into geolocation-based marketing could put the Web site into direct competition with Foursquare, Gowalla and Loopt.

But a blog on, argues that Facebook’s intention isn’t to compete directly with Foursquare and other geolocation sites, but to become an integral part of them. The blog speculates that Facebook’s new geolocation capabilities will be part of its new Open Graph API, which the blog describes as an effort to put its brand on everything.

Facebook’s plan, according to the blog, more likely is to get Foursquare and Loopt users to go through Facebook -- with the company taking a cut of the revenue -- much as game sites such as Zynga do today.