Last year when I met with Xtify, I roughly understood their business as one which took location data from a mobile device and published it up to the cloud where it could then be distributed to other web and mobile applications for use in providing location relevant services. With so much happening around the industry allowing devices to get their own location right there on the device I couldn’t wrap my ahead around the need for the service beyond some niche applications… and maybe I wasn’t alone, because the company is now pursuing a new and different tact.

Last week I was fortunate enough to attend the inaugural meet up here in the NYC area for LBS developers, where both Cloudmade and Xtify gave some great presentations. If you’re in the NYC area I highly recommend trying to attend, even if you’re not a developer… I am not a developer and I still got a lot out of it.

So I discovered during their presentation that Xtify, has turned to focus on the more broad area of messaging with a particular emphasis on a platform for managing geo-location triggered “push” messaging delivered into mobile devices without using SMS or email, “the first push notification service for Android” according to their site. 

So what this all means is that if you’re developing a mobile application and want to send location relevant messages directly to the users of your application either in-app or via the Phones native operating system notification capabilities, the Xtify platform will implement and manage this for you. Application developers will basically integrate the Xtify SDK with the application which will then operate in the background handling responsibilities like getting a devices location and sending it back to web servers, checking the location versus various rules on what, if any, messages should be delivered, and then delivering and triggering the notification back at the device.

So let’s say you’re in charge of running the Zagat mobile  application and you want to introduce a new capability where users of the application can receive special offers from restaurants when they’re either at the restaurant or nearby… Xtify could provide a turnkey way to integrate this messaging within the app and to notify Zagat app owners of the offer when they in a restaurant or nearby.  Similarly an app like Sense Networks Cab Sense, which gives you insights into the best nearby street corners to hail a taxi cab, may be able to push out useful travel related information like a big U.N. General Assembly meeting happening today on the east side of Manhattan or the closure of the West Side Highway for a bike race on Sunday, the kind of stuff local taxi riders may want to know about.

These alerts can provide a lot of value to consumers, but also help the app developer stay top of mind in what is the increasingly competitive market for attention among the growing number of applications out there.  There is of course also some significant potential for abuse here, where unscrupulous, or even just near sighted app developers could flood customers with unwanted messages clogging up their notifications in box.

Now the system seems designed to let some authoritative source like an app developer send out commercial or application oriented messages to ‘customers’ based on a number of rules, including location. But the founder behind Xtify, also started a location based dating app called MeetMoi which is where Xtify grew out of, and some of the potential related to rigging the system to allow anyone in a geographic area to push out a local area message seems pretty intriguing.  Applications like Hot Potato are trying to create specific platforms for virtual mobile socializing around events  (both virtual and physical worlds) and Anttenna is trying to similarly virtually connect buyers and sellers of goods that are nearby like Craigslist… so you might think that there is an opportunity to create a more generic local area messaging service similar to the direction Twitter is going with its geo initiatives. You can see a lot of scenarios where a drunk guy in a bar can message out that he needs a ride home to the west side of town, or a conference organizer can message out that after the event a sponsor is buying drinks at Bob’s bar next door, or a mom at a theme park that loses track of their kid can message out ‘oh crap, I can’t find my son Billy he has a green hat and red shirt, please bring him to the ferris wheel asap if you see him.’

The sort of stuff that happens by hyper local word of mouth now, could certainly use its mobile and digital equivalent, and something like Xtify may be able to help make it happen.

Check out the slides below for the full presentation from last week’s meetup.

So to those not in that industry here is the best I can do in summarizing what’s going on here.

The amount of display ad inventory available online is absolutely massive… far more than the supply of advertising dollars chasing it… so the price someone is willing to pay to serve any old advertisement to a random Internet user is pretty negligible. Meanwhile, the internet advertising industry long ago went down the path of selling itself as a data intensive, highly measurable and result oriented medium… and for better or worse is generally stuck with that description.

So… the name of the game nowadays is to not just serve anyone on the Internet any old ad and call it a day, but to serve a very specific group of people, sometimes a very specific ad, and measure what happened afterwards to see if it ‘worked’ in terms of driving clicks or purchases… rinsing and repeating until one gets the desired result or gives up and tries for a new result instead.  The more highly correlated a given piece of information is with some desired activity like a click or purchase, the more valuable it is.

So some folks are making tens of millions of dollars doing very little more than going to an open advertising exchange and buying low cost impressions generated by people they know, and then adding in the information they have on those folks in order to more effectively target ads in a game of information arbitrage.

The vast majority of folks are focusing on the part of the equation around WHO will be shown what ad… which can be things like people who shopped online for flat screen tvs in the past 30 days, or people who checked an online stock portfolio in the past 24 hours, or someone who just read reviews of new cars on an auto oriented site.

A great recent example of this is a company called Magnetic (http://www.magnetic.is) which just raised $5 million in funding some top VCs, and a company that PaidContent thinks could be part of the next big wave in online advertising.  What Magnetic  does is provides advertising re targeting data off of searches conducted at one’s site. So not only can site owners continue to run a Google AdSense for search program directly on their own site, but let’s say you’re running a car blog and someone searches for “Ford Mustang” on your site and later heads over to  somewhere like cnn.com to read about the disaster in the Gulf.  Ordinarily there is no way to know that a reader on cnn.com reading about the disaster in the Gulf may be interested in a Ford Mustang, but using a system like Magnetic allows CNN to directly get this information and try to use it to charge more for their ads, or alternatively ad buyers for someone like Ford may not even concern themselves with specific sites and instead simply buy people who have searched for their brand or products wherever they may go across the web, through purchases of ‘individual cookies’ via blind advertising inventory exchanges. 

Another similar example is aCerno which was recently acquired by Akamai for $95 million. aCerno uses consumer shopping data gathered from a co-operative of approximately 550 major e-commerce sites, to re target advertisements across the web based on their online shopping behavior. 

The key words to keep in mind about where the industry stands today is terms like “shopped online”, “checked an online portfolio”, “read an auto site”… notice one thing in common here… all these behaviors are taking place in front of a computer screen. But what about the vast majority (95%) of the times when all those folks walked into a Best Buy store, Fidelity retail brokerage or stepped foot onto a Ford auto lot to do their commerce the old fashioned way offline?

There is no reason why this game of information arbitrage needs to be limited to purely online behaviors, or to the traditional browser of the PC based Internet.

Is a guy who spent three and a half hours sitting in Yankee Stadium four separate times last month probably a better prospect to buy Yankee hats, mugs, and jerseys gear than the general public? You betcha. 

Is a user who spent 45 minutes at a local Ford dealer lot last Saturday, potentially someone in the market for a car with higher than average intent to purchase a Ford vehicle? Probably.

So you have to think that it won’t be long before all of that algorithmic, arbitraging media trading that we’re seeing online these days begins to bleed over into the world of offline meets online, using location data at the center, in fact it’s nearly here.

Now this could very easily turn into another rah-rah post about why mobile social applications like Foursquare, Gowalla, Loopt and MyTown are going to take over the world… they get you to fork over information about your whereabouts and that information can be digital adverting gold.

But I am not sure I am ready to concede that this is something for mobile social networks to own…  do you really need a user to push a button to tell you where they are in order to get that location information? Per a recent L.A. Times article, the latest Apple iPhone terms and conditions changed to include a section related to LBS where they declare that “Apple and our partners and licensees may collect, use, and share precise location data, including the real-time geographic location of your Apple computer or device” and the article also makes note of Google’s similar geo data collection policies for Android Phones. 

For at least a few years now companies like Sense Networks and Placecast  have been working with large volumes of aggregated location data, collected from a variety of places, in an attempt to unlock the value contained within a long history of geospatial locates.  So there are obviously other ways to get at this raw data and make it valuable beyond the self reported (and self serving?) check in, which after all is just a small snapshot of activity of a few million users at best. But how valuable is a string of user locates as stand alone data?

In the current online world, tracking a search query or information from a web page to turn it around for re targeting purposes is relatively straightforward since everything already exists digitally. But when someone goes SOMEPLACE in the real world now, the digital documentation about that place is currently pretty weak…  so going to a position in space at some point needs to get digitally mapped back to the vast reservoir of digitized knowledge that we have about that space.

Folks like Localeze have started us down this path by making business listings more rich versus the dry name, address and phone numbers of the days of the yellowpages, but they’re coming at it from a perspective of web and local search.

Meanwhile an interesting new company called PlaceIQ is coming at it from the perspective of painting a better contextual picture of the places people visit. In the same way that ContextWeb tries to understand the context of the content on a webpage to serve a better ad, PlaceIQ is looking to better understand the context of a place to serve a more relevant mobile ad to folks at that location, not based on the content within a mobile site or app, but on the geographic space surrounding the customer at that time.  Taking it a step further PlaceIQ, similar to companies like Magnetic and aCerno,  will look to extend that knowledge of place to using information about historical presence at places to better target advertising via re targeting… like a mobile ad for a Derek Jeter jersey targeted to someone who attended a game in Yankee stadium a few days earlier.

Just knowing that a person is at a given latitude and longitude alone may turn out to be about as useful as knowing someone is on the web… and from an advertisers point of view, pretty low value. But if that latitude and longitude can be resolved to a place, and a ton of other information assigned to that place, then a new rich dataset for targeting and re targeting across the mobile and geoweb will evolve with location and presence at its center.

It seems that the folk that have found this most useful so far are governments and energy companies.  According to the Metacarta site, there are millions of government documents of which over 70% contain significant geographic references.

I can see how this would be quite valuable for the folks in homeland security who could now potentially  connect the dots where a CIA agent writes up a report about a suspicious character on Mott street and another agency transcribes a phone conversation between bad guys referencing a business at a nearby location adjacent to Mott street.  It’s information that may not have been connected in the past if it weren’t for the previously unseen geographic/proximity link.  

The other category where Metacarta operates is in digital publishing, particularly around news content and this is the area I was interested in poking at a bit more. AOL’s Patch product has been getting a ton of press, Yahoo just plunked down $100 million for Associated Content, and other start ups like Outside.in are all operating in some shape or form in the area of hyper local content creation or aggregation.

Creating or aggregating all of that content for a hyper local audience of what may be just a few thousand people seems like an awful lot of work. So let’s look at some numbers…

Having worked with Associated Content before I suspect that its reasonable to get a 500 word article produced for $30, and let’s say that the article is about something happening in the town of Mamaronek, New York  a small bedroom community of NYC  with a population of 18,752 (at least as of the last census). So using some oversimplified math… in order to break even on the expense of creating the article assuming un limited advertiser demand for Mamaronek eyeballs at $15 CPM, the article would need to attract 2,000 views, assuming 1 ad per page, or 1,000 views assuming 2 ads per page… or approximately 10.6 or 5.3% of the town population respectively.

Now seeing that Quantcast estimates the domestic use of Google.com at around 157 million monthly unique out of a total population of 307 million people or about 51%, it seems a tad aggressive to assume that one publisher could get 10% of a local population engaged in their content… although just for the heck of it I looked up the circulation of my hometown newspaper the Gainesville Sun which has a circulation of around 45k against a population of around 125k or over 1/3 of the population, so maybe its not so crazy!

You can kinda see where the Excel  commandos may be getting excited, saying something like “if we can establish Patch as the next generation local newspaper and get 1/3 of the population reading the site and get articles produced at $30 a pop, we’ll be rich!”

But here are a few potential glitches to that plan. For one, as the barrier to creating local content is lowered, unlike in the traditional newspaper world, the number of competitive neighborhood sites will  be more significant, so getting 1/3 of the population to read your website like the Gainesville Sun has accomplished in Gainesville, will be much more challenging… outside.in will be right there challenging Patch  for the local eyeballs with a network of other local bloggers. 

Second and probably more importantly, is the advertising demand and pricing question.  Ad networks are awash in inventory, and geo targeting is just a simple check box away, so the eyeballs are already available at CPMs in the low single digits.  While small local businesses will be sold directly and the vast majority have never heard of advertising.com, I am not sure you can expect them to pay large “local content adjacency” premiums over the long run.

A quick perusal through the Patch job listings shows a lot of emphasis on the business directories business, so it seems that AOL may be trying to hedge their bets even further against the premium display CPM ad business  and trying to cast a wide net capturing ad dollars previously headed for local premium display, classified, and yellow pages.  Then there is the whole behavioral/re targeting opportunities when folks from the local sites show up later elsewhere on an aol property and upgrade the value of that inventory as well.

You can start to see where this local content begins to look like a valuable opportunity once you can get the production costs low enough and local ad sales folks in place… it all makes sense on a spreadsheet at least.

But what resonated with me most, was chuckling at the business listings that were purported to be surrounding me as I drove down fifth avenue on to Central Park South… home to some of the toniest hotels and shops like The Plaza and Pierre Hotels. According to my Nuvi right next door to those hotels was supposed to be a place called AAA Als Towing and then a few blocks later an auto repair place… yeah right, how many auto repair and tow places do you know paying more than a few grand per square foot for such prime real estate…  it was apparently the early days of POI spam, or at least a really bad dataset.

You’ve probably seen articles about the locksmith map spam problem on places like Google Maps, but its much more than that… the industry as a whole suffers from just really poor information related to documenting places… for too many years the map and navigation device makers were seemingly so focused on getting folks from point a to point b and documenting the roadways they’d use to get there, that they forgot about all the places in between point a and point b where you may want to stop and gas up or grab a bite to eat. 

But nowadays things have changed and folks are giving away the capability to navigate from point a to point b and looking for ways to make money from getting you interested in making stops along the way.

As I mentioned a few months back a company called Placecast is trying to help bring together the disjointed state of POI data, to help move the industry forward, by introducing a product called the MatchAPI.  What the MatchAPI does is allow developers to send in a reference to a geographic location through the API and receive in return any other references in the system that are a close match. The reason something like this is necessary is because there seems to be so many different proprietary datasets around without any centralized and unified source of reference to help connect them. Let’s start with a simple two dataset example where a company has a list of movie theatres from one source like Navteq (where they get all their POI data) and then wants to go to a different vendor like Fandango to get movie times and reviews for the movies happening in those theatres.  So if there are a few thousand movie theatres in the U.S. you can see how the task of matching up the Navteq list of theatres with the Fandango list of theatres could be pretty labor intensive… that’s one area where the Match API can come into ease some of this pain.  Now if you wanted to do something similar with say the 1 million or so restaurants from that same Navteq POI set in the U.S. and linking in all the Yelp reviews tied to those restaurants… well you can only imagine the amount of pain that the MatchAPI is alleviating.

But where things can really start to take off is when various systems that rely on “place” can more simply and seamlessly integrate and “speak” with one another on the fly, creating a much larger opportunity for all the players involved when the network effect begins to kick in. 

Right now there are hundreds if not thousands of location based services all largely operating independently with their own systems, definition of places and customers.   When the ability to share information between these services becomes more seamless, not only will the value to users increase dramatically, but folks like advertisers can begin to view this industry as a cohesive ecosystem, and one that has some meaningful  scale and reach which will expedite this becoming a viable new medium for them.

Right now even the most successful Location Based Services in the U.S. just have a few million active monthly users, which won’t put them on the radar screens of many big national advertisers.  In a way it’s all similar to the way that DoubleClick first helped cobble together a bunch of small websites into an online ad network and create a highly simplified way for advertisers to buy a large volume of eyeballs over 15 years ago. Right now if McDonalds wanted to throw in a two week promotion of their Shrek Glasses in the business listings for their 31,000 stores across all the map platforms, navigation devices, and LBS iPhone apps… well they probably couldn’t do it without a small army of buyers, designers and integrators.  This is the pain that the MatchAPI could eventually help go away.

Just today Placecast came out with news that after 60 days of having launched the MatchAPI platform, they’re finding that error rates in the data they’re seeing runs anywhere from 8% to 40% depending on whether it ‘professional’ data or ‘user generated’… finally a somewhat quantitative representation of all those towing and auto repair shops I noticed along Central Park South.   

For the nascent LBS industry there is no way that this becomes a big and viable opportunity for marketers if 8% to 40% of the time you either send someone to the wrong place, send them to a place that doesn’t exist or is closed, or give them the wrong phone number,  etc. … so fortunately there are folks hacking away at trying to help solve some of these problems, so we can move along to some of the bigger and more interesting innovations that are possible.

I’ve grown to the believe that there is a huge opportunity in the area that ReachLocal is targeting… there is so much advertising money floating around in the local markets and until recently so little attention being paid to servicing brick and mortar retail folks who just have a few thousand dollars a month to spend on digital advertising.

While Google is now up to something like 1.5 million advertisers, and has done a great job of servicing the long tail of online oriented advertisers. It’s the long tail of offline advertisers, which is proving to be a bit tricky to convert to online, not just because they’re the long tail and there are tens of millions of them, but they don’t live and die by traffic to their website… heck many don’t even have websites and can be pretty ambivalent toward the whole thing!

One of the newest companies to pop up on my radar screen in this area is a company called Paper G recently started by some Yale and Harvard students.  Paper G is focused on the digital display advertising space and one of their products PlaceLocal is trying to solvea familiar problem for this market which is how you make it super easy for folks with very little time, digital resources and digital wherewithal to develop and run digital display ad creative. 

The PlaceLocal product greatly simplifies the process of making an online display ad. I gaveit a trial with a popular burger joint, Five Napkin Burger, that opened a new location on the Upper West Side a few months ago.  Essentially all I had to do was type the name of the business and the city andPlace Local did most of the rest.  After typing in “Five Napkin Burger” and  “New York” PlaceLocal first found the business (ok so it was really the old location in Hells Kitchen, but I give them credit there anyway) and one click later it was busy scraping the web or hitting various APIs to find stuff to  put into the ad. While I waited a minute or two for it to do its thing, I must admit that I was pretty skeptical that it could be this easy and still be good, but I must say the result was pretty damn impressive.

After more than a few minutes of whirling ‘working’ icons… woo hoo it had found a bunch of content to use in the ad!  At this point you get to pick some VERY basic components to put in your ad like the logo, the design style and click through URL and PlaceLocal populates the rest with a slick flash movie full of restaurant images, menu images, and snippets from reviews from popular restaurant review sites like Yelp. 

There were a few hiccups with my trial run with Five Napkin Burger… PlaceLocal couldn’t come up with a logo so I had to crop the company name out of another image, but it was super easy to do with the tools provided by PlaceLocal.  And while at first pass most of the reviews selected were stellar there is one looping through that disses the endive leaves on their burger, and another Yelp snippet which simply says “a perfect side for this perfect burger” with no reference to what that side may be.   Fortunately they have great tool so you can easily get back in there and see the whole review and then edit what appears in the snippet in the ad.  In fact their tool for messing around with the assets that go into the ad were pretty good… you can add various photos and change things like business category and hours etc… and the whole thing is vey well designed to make it powerful enough to change many of the things you wanted to change without introducing too much complexity to the process.

Once the ad is created you can buy into three simplified buckets of media buying with spends ranging from $300 to $1,000 at what works out to about a $15 CPM.  

I am not sure how much traction they’ll get as a stand alone place to create and run local advertising but as a tool for easily creating local oriented ads the product does very, very well.  So it’s not surprising to see local newspapers and folks like Time Out New York flocking to check out their service as a valuable tool for their sales force selling their own owned and operated sites.  Over time too many of the similar format of intertwined user reviews and photography in a flash movie may begin to get old, but I suspect that they can develop some new templates to keep the ad creative options fresh and flexible.

It shouldn’t take long before folks like CitySearch, ReachLocal and others take notice and try to rip it off or partner with these guys.

Take all the simplicity and randomness of posting stuff you have or want to Craigslistand add some only-for-mobile features like filters based on proximity, 140 character limits on descriptions, and quick chat to check availability or coordinate for meeting up… and that’s pretty much Anttenna.

From my short experience with the app there is still a fair amount of work to be done to make the service a heck of a lot more user friendly…  like the somewhat unfriendly “Supply Chain” and “Demand Chain” terminology used to describe whether it something I have or something I want. The main page of listings defaults to stuff available nearby, and the list is full of the randomness you might expect with things ranging from a downright spamish offer for $200 rebate on blinds or a queens air conditioner installation company offering… and just a ton of nearby real estate listings with super short descriptions of apartments available for rent.

There is of course a way to filter just what you’re looking for by a variety of factors such as location and category by using the you guessed it ‘filter’ button. Categories include a long list ranging from straightforward things like books and furniture to less straightforward thingslike “items for rent”, “real time dating” and ‘rouse-around” (whatever the heck that may be).  But I think they’ll need to design the discovery process a bit better so it doesn’t take seven clicks to drill down into a category.

In theory the application makes perfect sense… connect the nearby people who want stuff with the nearby people that have stuff, keeping it simple for the mobile device experience yet keeping the power of filters, and added tools such as maps and communications to help improve the process.

Now comes the tricky part of how you take something that makes all the sense in the world in theory and get people to get the app, and post the availabilities of their rouse arounds en mass. 

Many of the things happening in the LBS space right now have a foundation in something that was successful on the web, with a mobile and location aware reinvention of a proven formula. That seems to be the case here with Anttenna as the mobile LBS equivalent of Craigslist, and we’ve seen it before particularly with efforts to re invent the social networking experience in a similar light via players like Loopt and Brightkite and many others. Ultimately I wonder how successful these can ever be.  As new and exciting as mobile location aware services on smart phones are, the total number of folks available to use the services is well below that of the web when services like Craigslist began to flourish online, which gives many of the web leaders in their space ample time to play catch up.

So I’ll just dive back in with one of the ones that I have been wanting to investigate further, just because it seems to come up the most and I’ve been negligent in checking them out… it’s Groupon and what I’ve heard more than a few times about them growing into a big player in the future of location based marketing.

So I finally spent two minutes signing up for Groupon and loaded up their iPhone app. As a consumer it’s pretty damn easy, simply register and tell Groupon what city you live in and every day they tell you about a super duper new deal that you can get at an area business… like a yummy Cheesesteak sandwich for $4 instead of the regular $11, or an $88 round of golf for $42. As with most anything there is some fine print, but it doesn’t seem too bad, and the savings often pretty significant.

For businesses the biggest benefit is driving sometimes huge amounts of foot traffic through the door to take advantage of the deal. Even if they make less (or no money) because of the deep discount, a bunch of customers being driven through your front door is usually not such a bad thing… and did I mention that unlike regular coupons, there is no upfront costs, Groupon just takes their cut once enough customers buy the deal through the Groupon website.

Coupons have been with us for over a century, and Groupon is just coupons on digital steroids with a few differences besides the no upfront costs for businesses. Unlike traditional coupons with Groupons there is just a single offer per market per day… so there is a sense of scarcity and ‘getting a deal’ created, and arguably Groupon gets customers a bigger discounts than most comparable paper coupons. Deals are marketed both by Groupon itself, but also since a minimum number of buyers is necessary for anyone to get the deal, customers are encouraged to promote the deal to their friends adding another powerful social marketing partner in the customers themselves.

So there you have it, a quite successful example of a company using a unique approach and leveraging digital technology to drive good old foot traffic into a brick and mortar store. Online driving offline…  woo hoo! The power of social networking… you betcha! Digital cutting out the middleman once again… yep. But is this really a killer location based opportunity? I am not so sure.

In the general sense, the offers are available on a market by market basis so in that sense its a location based offer, but only in the most basic sense. It’s not what I’d call hyper local or even local since they seem to be targeting large major metros… and from one point of view the lack of submarket geo location can be seen as a detriment… that $4 cheesesteak sandwich that is usually $11 is great but the heck if I am going to hop the subway ($4.50 round trip) for an extra 20 minutes during my lunch hour to go 25 blocks out of my way to save $7 on a sandwich… and that’s the problem I’ve had with many of the offers I’ve seen from Groupon so far: nice savings, but often not products relevant to me or convenient to places I go. The company seems to argue that this is kind of the point, getting people to go new places and try new things by dangling the carrot of a super low price in front of them.

But for Groupon, going more local than they currently do could begin to get tricky. In many ways their current model and going more local seems to work against one another… the web lowers barriers to make it easier and easier to get more and more people involved, achieving the big numbers of buyers that Groupon needs to be effective. Creating more locally targeted offers is great for potentially increasing relevance, but it also creates more and more offers diminishing the impact of any one offer, both in the marketing ‘wow’ factor and the number of folks who may be virally promoting any one offer. Too many friends ‘promoting’ their area deals would run the risk of devolving the offers into something that looks more like spam than a can’t miss opportunity, and seemingly the amount of Groupon promotion behind any one offer would also be diminished.

I also wonder how much of a role redemption rates play into their model… as in someone bought it because it seems like a cool thing to try and for not much money, but never get around to redeeming it. Stats seem to vary about redemption rates with gift cards ranging from 4% to 15%+ of gift cards going un redeemed, and 33% of the value never being redeemed (tower group). And you’d think that the potential for un-redeemed Groupons may even be higher for something like a $4 cheesesteak sandwich versus say a $20 Best Buy gift card.  This is another area where more localization may work against their current model, the closer and more convenient a retailer is, the less likely that they Groupon will go un redeemed.

It sounds like increased localization is already on the Groupon roadmap, it will be interesting to see how they do it and if it’s a success.  The amount of buyers they can get excited and on board for deals sometimes seems pretty amazing. I suspect there is a certain snowball effect derived from viral components of online social networking marketing that drive those large numbers of buyers today… the question will become how they’ll continue to exploit that when deals are geographically more fenced in, inherently limiting (or at least muddying the waters of) who is being marketed to for any single offer.

Now in the olden days when you just bought a printed foldable map this didn’t really matter much, but nowadays in the modern inter networked world of digital maps and folks creating a dizzying array of new services helping connect people with locations, it matters more.  Now within a single stand alone application like say a TomTom navigation device there is probably not much thought put into what you name a place, but in the web2.0 world where interoperability and information sharing reign, everyone needs to know what location everyone else is talking about when someone is talking about the business at 4151 North Central Expressway.

So rather than just getting everyone to try to agree on a standard, which could take years and years and would probably be a lot like herding cats, Placecast has announced today that it has developed a technological solution to the whole problem and they’re opening it up for free use.

The product is called the Placecast Match API…. and it’s described as “a Rosetta Stone for location data”. For those that need a refresh on their ancient Egpytian artifacts, this basically just means that they will provide a way to translate between the different “languages” that different services use to describe locations for the purposes of enabling interoperability between those services.

There is a great article on Tech Crunch that demonstrates how this problem manifested itself in the hot area of mobile social networking and the battle of the check-ins where folks may want to check in somewhere on a number of different services without having to fire up each service independently and do it manually. Given the viral and social nature of services like Foursquare and Gowalla, I guess it’s not surprising that this is where we’d first see the need for better interoperability between services.

One area where this is particularly interesting is around the area of location based advertising. One of the things that needs to happen to help ramp up growth in this area is more scale in order to make hyper local and location oriented advertising finally get on the radar screen of folks that control advertising dollars. It’s not that there are not a lot of consumers using these types of services today, there are… but usage is spread around among a lot of player.  Consumers may look up directions via Google Maps, Yahoo Maps or Mapquest, others may rely on their Garmin or TomTom devices, while urbanites without cars may just be checking in with FourSquare, Goawalla or Loopt or using one of a hundreds of local discovery services like UrbanSpoon, Yelp, Where, Geodellic, etc.

The amount of traffic to any one hyper local area on any one of these systems is likely not significant enough to create a media buy, but centrally tether them all together with a common reference point and pretty soon you have what begins to look like the beginnings of a network… a point of interest advertising network. 

Putting banners in apps and on wap pages is one approach to the location based advertising opportunity, but there certainly seems to be just as much opportunity if not more around “listings ads” connecting mobile users with the businesses they’re looking for from mobile search and discovery services and then capturing, sharing and aggregating the related check ins at scale across the ecosystem.

I am not saying that this is the Placecast end game, but something like the Match API and other similar offerings by competitors certainly seem like it could help spawn competitors to what folks like CitySearch are doing with CityGrid around the creation of ad networks tied to places.

What will be interesting  is to see how publisher view participating in such a system and the more thorough socialization of content from their system… when the depth, richness and accuracy of that content may be a significant source of unique competitive advantage.

Another up and comer in this area, with a new twist, that is beginning to get some press is a company called Hot Potato.  Here is where they fit in:

What they do: They create an online social network around the dimensions of “here” and “happening now”.  Facebook has people at its center of gravity and Yelp has places (mostly businesses) as theirs. Folks like Foursquare and Gowalla have seen the value of connecting the two with gameplay around the places where people go. 

Hot Potato is similar, but with a focus not as much on the places themselves as on the live events happening either directly in a real nearby place or one 1,000 miles away. Think of it as a mobile or virtual social layer on top of eventful or meetup.com where folks check in to events to socialize.

How it works:  As with Facebook, Yelp, Foursquare and Gowalla, having your friends involved is a key component of the service.  So the first step is to invite all your friends with handy friend imports from Facebook, Twitter and Gmail supported. Once your friends are connected you can kind out what events they’re attending or create your own events and invite others to join you.  Like with Foursquare, people check in to an event in progress and can share comments and pictures with other attendees… events can be open to anyone or made private for only a select group to participate.

I can see this type of tool being particularly good for a business conference where everyone is there to network and share information and to socialize. I tried to set an event up for the Where2.0 conference happening in San Jose this week…  seems that no one found it and a new one was created instead… although even that one had just 16 folks check in and only on posting that I could see.

The Hot Potato service is just getting off the ground, and seems to be in its very early stages at this point, with many kinks to be worked out. The website seems to be down a lot, and I left a question with customer service five days ago about how to set up an event, and have yet to hear back.

For attending real world events at physical places it will be interesting to see if Hot Potato can find enough ways to differentiate itself with features targeting the needs of live event goers maybe around tickets and what to do afterwards. Currently there is not a lot more you can do with Hot Potato than what someone might find checking in somewhere like at Madison Square Garden for an event or at ‘Snowpocalypse’ on Foursquare… with their more loose interpretation of ‘place’.

The service is currently heavily used for ‘virtual events’ around social television watching, like March Madness or the latest episode of ABC’s Lost… making what for many is likely not a very social activity of sitting in front of the tv at home, a bit more virtually social at least. Although it feels like the live and in person events need a different set of capabilities than the virtual event attendance like watching a tv episode, so I suspect that at some point soon, Hot Potato may need to split and decide which market they’re after and how to really differentiate themselves.

Its an interesting enough twist however to continue to keep an eye on.

It’s not that I don’t think local review content is important, really, it is. It’s just that this type of stuff has to have been some of the earliest content on the Internet, I am sure some of the early messages across ARPANETwere something like “took Molly to Surf Shack on Wilshire after switch testing last night, fish tacos were keen”.   It just seems like sometimes it just takes FOREVER to not make much progress in Internet land.

You have to give Yelp a lot of the credit for the current surge of interest, not only is it a pretty valuable service, but the Google + Yelp  deal that never happened,  and now the Yelp business practices lawsuits have kept them on the front cover of the business section for a while now.

So if you wanted to reinvent this baby one more time, what might you do? Well let’s check under the hood of Alikelist. 

First of all, while it’s a horrible name, it does pretty much sum up what its all about, it’s a list of places you like… so in that sense right off the bat its not a traditional review site at all where the general public pretends to be the next A.A. Gill, giving their two cents on every joint in town.  So that’s it, stuff you like in a list… if you want to talk about stuff you don’t like, well go to a different site, not here. 

Beside the fact that its all positive stuff, another important differentiator is that it’s also not about the anonymous general computing public. It’s not just about WHAT comments are being made about the local businesses, but more importantly WHO is behind those comments.  This has always been the shortcoming of existing review sites… you have no idea who is doing the talking, and whether they’re someone you should be listening to.  There are a multitude of features in ALikeList which allows folks to tie back into their social networks to ask for and receive recommendations on local businesses which make this a key component.

Alikelist is a site to discover the places that your friends, family and colleagues like, and to read a little bit more on why they like the places they like. It simply tries to digitize that conversation that must happen a million times a day offline “Hey Bob, I am looking for a good xxx, do you have any suggestions?”… followed closely by “oh yeah, lemme think… well try xxx,  they were awesome.”

The idea and site execution is great because of it’s pure simplicity. People offer up their opinions on businesses online all over the place, but in many ways it’s all become a big convoluted mess, there is not one central place to go look, and there are often hundreds of long reviews written by folks like bigjoe23 to sort through in order to formulate an opinion. Alikelist thinks that a simple thumbs-up and blurb from a more trusted source will nicely supplement, if not trump, hundreds of longer reviews from the bigjoe23’s of the world.

Like with Foursquare and their check-ins, the business opportunity seems to be largely around allowing those local businesses to better connect with their best patrons in the local community, the ones who not only visit their establishments, but who are walking advertisements for their businesses via their check ins and Ilikelist status broadcast out to their social networks.