Matthew Ingram of GigaOM posits that Facebook Places’ “real target” isn’t Foursquare. Rather it’s Yelp, because Facebook is trying to get local businesses to claim their Pages and will eventually be selling presence or ads to them:
Facebook’s real focus with this launch isn’t individual users or even Foursquare: instead, it sees Places as a way into the local business and local advertising markets, and the company with the target painted on its back is Yelp.
But this characterization is inaccurate. Facebook is not “going after” Yelp in any specific way — though Places may well emerge as a competitor to Yelp in the near future. However if you want to argue that Facebook is going after anyone in particular, the same thing must equally be said about a range of companies that includes yellow pages publishers, newspapers, cityguides, local verticals and many others that offer local information online and/or sell ads to small businesses.
There will clearly be competitive fallout in the local space from a well-executed version of Places (and that’s a contingent statement). However there are a number of things coming together in Places with their own logic and momentum and which exist independent of any single competitor:
- Facebook returns to its roots as a location-based social network
- Facebook is extending its online culture into the “real world.”
- It’s creating additional things to do as mobile users move through the world of physical places.
- From the FB POV, it makes sense to organize content (news feeds) around locations, as much as it does individuals
- Facebook is improving what it can offer to the many small businesses that have set up Fan Pages (though this is not exclusively for SMBs)
- And last but not least, Facebook recognizes there’s a lot of cash flowing through local, albeit somewhat elusive to capture
Facebook has been working on or at least thinking about local and SMB-oriented products for several years. Its primary motivation is not to sell ads to SMBs or get a piece of the local pie — at least today. This product “makes sense” for Facebook. If you want to make any competitive references, Foursquare and Twitter (and maybe Google) figure more prominently than Yelp in the calculus.
Clearly Facebook knows who the significant players are in LBS and local. And Yelp is obviously one of them.
CEO Mark Zuckerberg spoke explicitly at the launch event about the Places team trying to make the Places experience different than other check-in services. So there was obviously some thinking about competitors in the design of the consumer-user experience.
The local market is large and, in general, not a binary, zero-sum game: Google vs Facebook, Facebook vs Yelp, etc. And before we say who’s going to be “crushed” or “destroyed,” I would submit that the ultimate success of Places depends on how the experience and the product evolve.
I can’t use it today the same way I use Google search/Maps or Yelp for that matter. I can check-in and talk about a place; I can see who’s nearby, but I can’t plan where I might like to go tonight for dinner or what to do this weekend. That capability could certainly come to Facebook Places, but it doesn’t exist at the moment.
Should Yelp be mindful of the potential competitive threat? Sure. But so should YP publishers and newspapers and Google, Yahoo, Bing Maps and perhaps dozens of others.