In a report by the Wall Street Journal, Foursquare will soon begin charging a small number of partners to use its Venue Database. Microsoft and Foursquare recently agreed to a $15 million investment/licensing deal that will allow Foursquare content to hit Bing search results and Windows Mobile.
Included in the WSJ article:
The New York startup is negotiating with the heaviest users of its data to pay fees or offer services in return, Chief Operating Officer Jeffrey Glueck said. Deals will be reached on an ad-hoc basis with each developer and will affect under 1% of the 63,000 companies that use Foursquare’s database, said Mr. Glueck, a longtime Internet executive who joined Foursquare earlier this month.
This move makes sense for Foursquare, as it lets them focus on monetization.
Here’s the catch…it’s going against the grain of making the basic location database free. Originally, the only sources primarily used was Infogroup, Acxiom and Localeze. All three of them were licensing deals.
Multiple parties have entered the market providing free business data over the last four years. Because of this, the licensing model has been put under some pressure.
In its defense, Foursquare is saying that it will only be charging their largest customers. Even so, this could possibly cause other users to start looking for other alternatives in case Foursquare comes after them. It just so happened that Foursquare switched itself from Google Maps to OpenStreetMap when this happened.
There is always the question of accuracy and completeness in Foursquare’s Venue Database, as it was built almost completely by users.