Microsoft checks in at Foursquare by injecting $15 million of funding and checks out by inking a licensing deal for location data.
Even as the world's attention rested on Microsoft's new CEO Satya Nadella on Tuesday, the software giant announced that it is investing a considerable amount to the startup Foursquare that became popular for its location-based mobile application. As part of the deal, Microsoft will be able to tap into the data of Foursquare and use it to enhance its products.
"This is huge validation for the stuff we've been working so hard on. It's one of the leaders in the space we work in looking at us and saying we can really help power the next generation of devices," said Foursquare CEO Dennis Crowley.
The additional funds will be added to the $35 million raised in December, bringing the additional capital of Foursquare to $50 million. Crowley revealed that the deal has been in the works but was delayed due to the nature of the agreement. There were reports that surfaced in August that Microsoft is working its way into Foursquare.
"So, 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," Foursquare disclosed in its official blog.
Microsoft will be able to utilize the new partnership to enhance its Windows Phone operating system and boost the features of Cortana, the company's own software assistant in development, so that it may become competitive against Apple's Siri and Google Now of Android smartphones. It will not simply make use of Foursquare's five billion check-ins and 60 million entries created by its 45 million users but dig deep into the features and functionality of the mobile application.
"They're not just paying for the same API integration.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," said Crowley, referring to the potential of Foursquare's recommendations and its ability to sense where its users are, even without checking in.
The details and terms of how the location data license will be used by the companies were not disclosed, but Microsoft hints of contextually aware user experience for its products in the future, maximizing the potentials of Bing search.
As for Foursquare, the freshly-inked deal will help prove itself that it can use its data to generate money.
For Windows Phone users, it will either be a seamless integration to the platform of Foursquare data or it will be a creepy not-so-new experience offered by another technology company.