Microsoft Invests $15M in Foursquare

The software giant licenses the location-based social network's tech to help Windows and Bing users hone their sense of place.

Big leadership changes aren't the only things happening at Microsoft. The Redmond, Wash.-based IT giant is also making waves in social media.

Foursquare, based in New York City, announced on Feb. 4 that the location-aware app maker has inked a multiyear partnership with Microsoft that grants the software maker access to its crowdsourced technology. According to Foursquare, its expansive "places database" contains more than 60 million entries and 5 billion check-ins. The database is foundational to the company's app, and usage has climbed by over 30 percent with the latest version, boasted the company.

As part of the licensing deal, Microsoft invested $15 million in Foursquare, adding to the company's late-2013 Series D round of financing provided by DFJ Growth and Capital Group and valued at $35 million. The new infusion of cash will help the company "continue to build out our product, and, even more excitingly, make sure more people get access to the power of Foursquare," said the company in a statement.

Foursquare explained that its database will be used to supplement some of Microsoft's OS, mobile and search offerings. Soon, said the company, "when you use Microsoft devices powered by the Windows and Windows Phone operating systems and products like Bing, places will be enhanced by Foursquare—to provide contextually-aware experiences and the best recommendations of any service in the world."

The move could help bolster Microsoft's mobile device efforts. In September, the company announced plans to acquire the hardware and services unit of Nokia, Microsoft's premier Windows Phone partner, as part of a deal valued at $7.1 billion. The hefty sum includes $2.1 billion in licensing fees related to the Finnish company's patents and mapping technology.

Now, Microsoft will be able to add an extra layer of context-driven, social-enabled location awareness and discovery to future Windows phones and mobile devices.

Jon Tinter, general manager of Business Development at Microsoft's Application and Services Group, told TechCrunch that the deal is part of his company's initiatives surrounding contextual computing. "The more information you have about the user [and their location], the more value you can provide," said Tinter.

Microsoft is getting more than just data out of the deal, wrote TechCrunch's Matthew Panzarino. He noted that "the technology that empowers features like Foursquare's anticipatory push notifications is just as important, if not more so, to Microsoft."

Holger Luedorf, head of business development at Foursquare, hinted that the technology integration will have an impact on Microsoft's personalized search capabilities. In addition, executives indicated that the partnership benefits both their companies.

"One thing [Tinter and Luedorf] did say is that Bing and Foursquare will be handing users off to one another with contextual data," reported Panzarino. "This allows the user to 'come in hot' with intent information about what they're searching for and where they are, which should improve results on both sides of the coin."

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...