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SXSW a battleground for mobile 'location war'

By Doug Gross, CNN
A big theme at the South by Southwest Interactive festival: The battle between location-based services Foursquare and Gowalla.
A big theme at the South by Southwest Interactive festival: The battle between location-based services Foursquare and Gowalla.
  • Location-based mobile apps were the big theme at this year's South by Southwest Interactive
  • A rivalry developed between frontrunner Foursquare and upstart Gowalla
  • Both services blend social networking with a location-based game
  • But Facebook may eclipse both of them if the networking giant launches its own game

AUSTIN, Texas (CNN) -- It was billed as the "location wars" -- a fight for the affections of the smartphone-wielding techie elite that converged on Austin this week for the South by Southwest Interactive festival.

On one side was frontrunner Foursquare, whose mobile app blends social networking with a location-based game. On the other: upstart Gowalla, a mobile networking service that offers ... well, pretty much the same thing.

The two rivals, which let smartphone users "check in" at bars, restaurants and other hangouts and share their locations with friends while earning virtual rewards, were arguably the biggest topic at this year's South by Southwest (SXSW).

The consensus Tuesday -- the tech festival's final day -- was that neither scored a knockout punch, leaving New York-based Foursquare as the leader in the still-developing market and positioning Austin-based Gowalla as a solid runner-up.

"I think they're both great applications; I think they're both tweaking design," said festivalgoer Scott Belsky, CEO and founder of Behance, an online portfolio platform company. "I think that's going to be the determining factor of a winner in this case -- really, how visionary the design tweaks become."

Foursquare started the week with about 500,000 users and Gowalla with 150,000 -- small change in a social-networking world dominated by Facebook and its 400 million-plus registered accounts.

But both services are just a year old, and make their SXSW appearances in the hopes that online trend-setters here will embrace their apps and spread the word after they fan back out across the United States and abroad.

Foursquare's founders could be seen all week in front of the Austin Convention Center on a chalked-up patch of sidewalk, hosting rounds of the ball game from which their application derives its name.

Not to be outdone, Gowalla handed out free T-shirts and other convention "swag." Both companies rolled out special SXSW features, such as letting festivalgoers check in at speeches, panels and booths, not just buildings or businesses.

They also hosted rival parties -- both of them well-attended -- across the street from each other on Monday night during what Foursquare CEO Dennis Crowley calls "spring break for nerds." Pranksters hung posters around Austin that pitted the two parties against each other in a faux boxing match labeled "The Geosocial Showdown."

"Coming down here, all we wanted to do was make sure the servers were staying up and running, that people were using it [Foursquare] and that people were still psyched about it," he said. "We're definitely there. There's a real good vibe about what we're doing."

Foursquare made a splash when it debuted at last year's festival. With no big new launches at SXSW this week, Crowley feels like his application -- which some have called "the next Twitter" -- leveraged festival buzz to reach new levels of popularity.

"People are doing visualizations of dots on a map showing Foursquare check-ins versus other check-ins," he said. "There's a lot of Foursquare blue on those maps."

One of those visualizations -- -- tended to show Foursquare with the most check-ins during the week, but with Gowalla staying close (aided, perhaps, by the festival happening in its hometown).

For their part, Gowalla's crew said they were thrilled with the response they received.

"I think, in retrospect, we'll look back and it'll be considered a stellar weekend for us," said Gowalla CEO Josh Williams. "This is a week that certainly established us as one of the dominant leaders in this space."

Williams said traffic during the festival more than doubled the app's daily number of check-ins.

The future remains to be seen for both applications -- as well as other place-based tools like Yelp! and MyTown. With Facebook announcing that it's getting into location-based check-ins, it seems only a matter of time before the networking giant introduces a similar game.

"If Facebook enters into this, and I don't think there's any reason to think they won't, they'll just slaughter everybody," said Alexandra Samuel, director of the Social and Interactive Media Center at Emily Carr University in Vancouver and a panelist at South by Southwest.

The key may be whether the current players can continue to grow their usefulness as a social tool outside of events like SXSW, where festivalgoers have good reason to constantly check which speeches, panels or parties their friends have checked into.

Foursquare has announced partnerships with Starbucks, Bravo and others, while Gowalla has inked a deal with the Travel Channel, some smaller companies and had SXSW-specific partnerships with Chevy and Palm.

Jay Adelson, CEO of news-sharing site Digg, made what amounts to a shocking confession to the festival's plugged-in crowd -- he doesn't use any of the location-based apps.

"I think it's yet to find its sweet spot in terms of being practical enough to live beyond the fun of the game," he told CNN. "Because, when the game gets boring, if you want to keep people using it there has to be some inherent value."

The partnerships, he said, could be key.

"The idea that maybe if I check in some place I get a free drink or something? OK ... now it's starting to really get interesting. That's the kind of stuff I think in the next 12 months you're going to start seeing."

CNNMoney's Laurie Segall contributed to this report.