Location-based mobile social networking revenue to hit $3.3bn by 2013

07 Aug 2008

Providers such as GyPSii, Pelago and Loopt are revolutionizing social networking with their location-based mobile social networking services. Users are facing loads of new interacting opportunities like sharing real-life experiences via geo-tagged user-generated multimedia content, exchanging recommendations about places, identifying nearby friends and setting up ad hoc face-to-face meetings.

ABI Research principal analyst, Dominique Bonte, pronounced that location-based mobile social networking revenues will reach $3.3 billion by 2013, but successful business models may differ from what many observers expect.

"While location-based advertising integrated with sophisticated algorithms holds a lot of promise, the current reality rather points to licensing and revenue-sharing models as the way forward for social networking start-ups to grow their customer base and reach profitability," says Bonte. "Recent evidence: the agreements between GyPSii and both Garmin and Samsung. Similarly, Loopt has established partnerships with all major US cellular carriers."

Several social networking vendors obtained license for new positioning technologies such as Skyhook Wireless' hybrid solution combining GPS, Wi-Fi- and Cell-ID for improved indoor coverage. Open location-based platforms such as uLocate's Where are running social sites. However, mass market adoption is hindered by several factors, including privacy concerns, the cost of data plans, and the fact that many small players are struggling to create sufficient brand awareness in a fragmented market.