Honkfish

If you keep up with tech news you’ve probably heard that Places has launched – a geolocation feature on smartphones that lets you check-in and share where you are and what you’re doing there on Facebook. Many analysts are now wondering if small geolocation companies like Foursquare, which has about 30 employees, can even coexist with Facebook Places. Personally, I can’t image that companies like Foursquare, Gowalla, and other geolocation start-ups didn’t see this coming and I believe they have been brainstorming for months on how to distinguish their product as more than just a geolocation service. I am excited to see what these companies will come up with in the future.

That being said, Facebook is already miles ahead of other geolocation companies. First, Facebook has sheer power in numbers. With over 500 million users, sharing where you go with your friends is easier than ever – and let’s admit it, that is the coolest thing about geolocation. Secondly, although Places lacks the gaming aspects of checking-in like the “badges” or “points” that make Foursquare popular, Facebook has the money and manpower to make checking-in fun and profitable in the future. Whichever company can make the check-in service more valuable to users and businesses, whether it be through promotions or reach, will have the upper-hand in the geolocation war.

For now, the future looks grim for Foursquare and Gowalla. Even Google can’t compete with Facebook when it comes to social media – look at the failures of Google Wave and the limited use of Google Buzz as compared to the Share button on Facebook. My advice to the smaller geolocation companies? If you can’t beat ‘em join ‘em. Integrate APIs with Facebook so users can choose to display Places check-ins in your applications as well as on Facebook. The biggest barrier Foursquare ever had was getting more users to join, now that they can get users from the Facebook market they can grow. Maybe there will be a happy ending for geolocation companies after all?