
Yahoo in Talks to Buy Foursquare - theyeti
http://techcrunch.com/2015/04/15/sources-yahoo-in-talks-to-buy-foursquare/
======
interesting_att
People forget that Mayer acquired 56 companies (57 if Foursquare deal goes
through). That is, 41% of all of Yahoo's acquisitions over the past 20 years
happened in the last 3 years. Think it is important to analyze this Foursquare
deal the context of this yet-to-be-proven strategy.

Back to this deal: Interesting possibility, for sure. Will it work out? Who
knows with Yahoo.

Foursquare assets:

    
    
         1) Brand name with both consumers and businesses
    
         2) 45m daily active users
    
         3) Valuable data- Can improve Yahoo Search, Yahoo ads, etc
    
         4) Large group of domain experts
    
    

Yahoo's value add:

    
    
         1) Yahoo does have a strong ad sales department, so it can bring lots of brand names to Foursquare
    
         2) Can heavily integrate Foursquare into its search features- so Foursquare's DAU can stabilize/grow.
    
    

Seems like Mayer's strategy is:

1) Buy her way out of changing Yahoo's employees + culture. This is a longer
term play.

2) Try to create some constellation of a platform. Ideal world for Mayer would
be:

    
    
         a) Get your homepage to be Yahoo
    
         b) Read the latest trending headlines via Yahoo media 
    
         c) Yahoo stories pump up Yahoo-owned Tumblr blogs, Yahoo-owned Flickr photo sharing, etc
    
         d) After that, you search for things on Yahoo. The search would ideally share information coming from Foursquare.
    

The big thing is on execution and that's why people constantly criticize
Yahoo. If they do actually make a sensible platform, expect Mayer to be viewed
very positively.

~~~
jonathanjaeger
"2) 45m daily active users"

Source? Maybe user signups, but I can't imagine daily active users.

~~~
_asummers
Looks like it's registered users, as of a year ago.[0]

[0] [http://www.businessinsider.com/foursquare-
surpasses-45-milli...](http://www.businessinsider.com/foursquare-
surpasses-45-million-registered-users-and-begins-collecting-data-in-new-
ways-2-2014-1)

------
UUMMUU
This has got to be entirely for their location data. While I see the migration
of check-ins to swarm as Foursquares way to say individual check-in data is
largely useless, their data on latitude and longitude of businesses as well as
their somewhat lengthy knowledge about the venues from user reviews is very
valuable. Foursquare is also probably cheaper than buying Yelp, or Google
Places which are the only other ways to get this sort of in-depth information.
Untappd is exclusively Foursquare so you also get a link to all that
information. I see Foursquares migration away from check-ins and more of a
location API as their way of saying "there are so many niche markets that do
check-ins why not just focus on what we do so well which is providing location
/ review data"

~~~
mason55
> _While I see the migration of check-ins to swarm as Foursquares way to say
> individual check-in data is largely useless, their data on latitude and
> longitude of businesses as well as their somewhat lengthy knowledge about
> the venues from user reviews is very valuable_

The problem is that without ongoing individual check-ins the aggregate data
becomes stale and useless, especially when you're talking about the kind of
small businesses that are going to make up the long tail of any monetization
strategy. There's no way Yahoo! would do this as a pure data play unless they
have a plan to revive the individual check-ins.

~~~
UUMMUU
I wonder if they are letting the smaller apps (like Untappd) be their check-in
frontend and they basically just aggregate up all the locations the people
have "checked-in". With Untappd, to create a new location, you have to
download Foursquare and create it so it keeps users creating new venues and
you immediately have a somewhat genre.

------
CyberDildonics
When your company is on its way down and may never make money again, Yahoo
will be there.

~~~
nashequilibrium
Foursquare has build a solid data business, also its data team is one of the
best out there. Go on youtube and watch some of their presentations to see
what is possible with their data. The issue is that they are stuck in a
strategy and a founders vision, this makes it hard to totally change their
business, branding etc. I still think apple should have bought them a long
time ago, but it is a solid buy for Yahoo, not the foursquare part but the
data side, which is worth more.

~~~
srj
I don't understand why they pivoted to a Yelp model instead of just trying to
grow check-ins and market their data to businesses. For at least the US market
I imagine Foursquare is the best dataset out there.

------
whatok
[https://twitter.com/CNBCnow/status/588354385249435649](https://twitter.com/CNBCnow/status/588354385249435649)

edit: cnbc saying they are not in talks for the twitter blocked individuals
here

~~~
whatok
[http://www.cnbc.com/id/102588909?trknav=homestack:topnews:7](http://www.cnbc.com/id/102588909?trknav=homestack:topnews:7)

additional info

------
chatmasta
What is Yahoo's acquisition strategy? Looking at the list of acquisitions
since Marissa Mayer's arrival [0], the theme seems to be pageviews + content +
userbase + advertising. This is the strategy of a media company. Attract as
many eyeballs as possible, then monetize them.

How does Foursquare fit into this? Perhaps the plan is to turn it into an
advertising platform for businesses, and differentiate from Yelp through
feaures like better review transparency?

Advantages I see of Foursquare:

\- Recognizable brand, offline and online, despite declining userbase.

\- Lots of brick-and-mortar businesses already signed onto platform.

\- Businesses pay money to advertise. Yahoo can monetize offline channel and
reach customers in-store.

\- Businesses frustrated with Yelp, now is opportunity to differentiate.

This acuisition could fit into the "media company" strategy because it enables
monetization of businesses and opens up offline communication channels for
reaching customers.

[0]
[http://en.wikipedia.org/wiki/List_of_mergers_and_acquisition...](http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Yahoo!#cite_ref-
Tumblr_83-0)

~~~
genericresponse
For a very long time Yahoo considered itself first and foremost an
entertainment/media company. It considered "online" as its channel.

It's not a bad strategy given that Yahoo isn't particularly technically
exceptional.

~~~
blumkvist
How do you definite technically exceptional? Trendy javascript frameworks?

[http://labs.yahoo.com/](http://labs.yahoo.com/)

~~~
igorgue
Some people just talk out of their asses, Yahoo has been for a long time a big
player when it comes to be technically exceptional.

They were doing all the big data stuff we see as "cool" way before it was
cool.

~~~
gwbas1c
Times change!

------
mxdyx
I'm going to post it here because the other post complaining about
FourSquare's check-in function (Swarm) dying is saturated.

I'm a big check-in user but FourSquare's pivot has been brilliant. You can
clearly see the benefits when they partnered with Twitter, with FourSquare
being the 'Google of the physical world'.

Having a dedicated app for checking in (meaning the people who like to check-
in are properly looked after in their own, siloed app) is a lot nicer than
before.

Back to Yahoo!: Don't think this will be a good acquisition. Look at their
previous acquisitions: Tumblr. Nothing much has happened, no major
monetisation project.

Twitter would be a better company to buy. It also makes logistical sense as
well. Combination of Twitter and FourSquare would be an effective combination
against Facebook, and also Google Plus and Google Maps.

~~~
free2rhyme214
Twitter said no to Yahoo already.

------
sharkweek
Pump the brakes a bit here, a lot of folks I trust saying no such acquisition
talks are taking place.

[http://recode.net/2015/04/15/sources-say-yahoo-foursquare-
ar...](http://recode.net/2015/04/15/sources-say-yahoo-foursquare-are-not-in-
talks/)

Ugh... I hate that I enjoy this type of gossip so much. It's the reality TV of
my demographic.

------
libraryatnight
Do people still use foursquare or is this about something else? I don't know
anyone who still uses it. At work, I once remember a time when people were
competing for most check-ins at the coffee place across the street, or even
our building itself.

Now, nobody ever mentions it.

~~~
tommoor
Used to use it, but the last redesign just made it unusable imo. I switched to
Yelp when that came out after previously being a Foursquare user for 5+
years...

~~~
misiti3780
agreed - foursquare was great, then they split apps, now it is completely
useless. maybe they were ahead of their time ...

------
binoyxj
Looks like Yahoo! is where startups go to rest in peace!

~~~
lavamantis
Another solid purchase by the company that bought broadcast.com in April 1999
for... drumroll... $5.7 billion! Yes, I'm actually not making that up. It's
why you know who Mark Cuban is.

------
venomsnake
Seems their list of troubled acquisitions was not long enough ...

If Mrs. Mayer has strategy - she better execute it fast. If she has not - at
least deal with tumblr before wasting money on another company.

~~~
chatmasta
I think she has a pretty clear strategy, as I mentioned in another comment in
this thread. Look at the list of acquisitions since she joined as CEO. [0]

Almost all of these acquistions fit into one of three categories: content,
advertising, mobile. The strategy is to build Yahoo into a media company.

[0]
[http://en.wikipedia.org/wiki/List_of_mergers_and_acquisition...](http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Yahoo!#cite_ref-
Tumblr_83-0)

------
kin
A lot of people here don't realize Foursquare is something entirely different
now. When it comes to traveling to a new place Foursquare definitely beats
Yelp in recommendations.

For check-ins and that sort of gamification there is Swarm.

------
gregrata
Used to be one of my favorite apps - used it a few times a day. Until great
bate-and-switch! :)

[http://locationplay.blogspot.com/2014/08/so-long-and-
thanks-...](http://locationplay.blogspot.com/2014/08/so-long-and-thanks-for-
all-checkins-or.html)

------
rokhayakebe
Related, but unrelated: Many people who perform a search using the default on
their browser do not know whether they are on Google, Yahoo, Bing. They just
Googled it, Google may as well be a verb to them as in "I googled it on Yahoo.
The first link was from Foursquare."

------
a2kadet
How does this kind of thing leak? When the last company I was at sold, most of
us weren't even told for fear our acquirer would get cold feet if the terms
leaked.

~~~
ddebernardy
It's part of the M&A playbook. One way to test whether a company is for sale
or willing to buy you is to "leak" that you're currently in talks with your
target acquisition or acquirer.

You get a response sooner or later, either in the form of a firm denial by the
other party through the press, or in the form of someone picking up their
phone (either from the target itself or from a potentially interested
alternative).

------
YoAdrian
So a company that no one cares about is purchasing another company that no one
cares about?

~~~
mlmonkey
But apparently they care enough to point out that no one cares about them....

------
patricktoolan
At least Foursquare is mobile-native, which is one of the primary goals of
Yahoo. One of the primary things Foursquare desperately needs is scale, which
is one thing Yahoo can legitimately claim to have. For Foursquare it's a bit
like admitting defeat, but being eaten by Yahoo could be a good move for
users. I've been a foursquare fan since 2011 and would love if the service
could regain some of its former luster and glory!

~~~
zimpenfish
Foursquare also makes a good tie-in with Flickr and their WOEID[1] stuff.

[1]
[https://developer.yahoo.com/geo/geoplanet/guide/concepts.htm...](https://developer.yahoo.com/geo/geoplanet/guide/concepts.html)

~~~
Doctor_Fegg
The Yahoo Geo team that gave birth to WOEID is no longer. But if you were
looking for a geo acquihire, Foursquare would be a pretty amazing one.

------
weisser
Foursquare isn't about checkins anymore, it's about discovery and the TL;DR.

Yelp users love to go on and on and on in their reviews while Foursquare's
ratings aren't review-driven though I've found them just as accurate.

------
dheera
I pray that their API stays as developer-friendly as it is now. Google's
Places API ToS makes it practically unusable and I can't think of any other
obvious alternatives.

------
anuraj
Yahoo is indeed the place where startups go to die!

------
dataker
Yes, Foursquare's situation is bad. Still, it has gathered precious and unique
data.

One shouldn't underestimate its holistic value.

~~~
SneakerXZ
Exactly, they have gathered precious and unique data but world is changing so
fast and if these data are not updated they will be worthless.

------
krschultz
Looking at Foursquare's history on CrunchBase, they show "only" $150 Million
in funding. That's not even accounting for some of it being debt rather than
equity financing.

That makes $900 million a good return, even though I'm sure it's not the peak
return FourSquare good have ever gotten.

------
cygwin98
It is funny to see that the total amount Yahoo gained from all her other
acquisitions put together is less than a fraction of the Alibaba deal.

------
cwkoss
Yahoo is forming a monopoly in the outdated tech company space.

------
igorgue
Congrats to the founders they did it again!
[http://en.wikipedia.org/wiki/Dodgeball_(service)](http://en.wikipedia.org/wiki/Dodgeball_\(service\))

------
mikelyons
I couldn't even remember what foursquare was ...

------
ar7hur
Yahoo and Foursquare both lack a clear strategy moving forward. I'm not sure
adding two struggling companies makes a strong one. Reminds me of
Microsoft/Nokia.

------
eonw
that would be another bad acquisition.

------
supergeek133
People still use Foursquare? My first reaction when seeing this was: "What
year is it?!"

~~~
MrBuddyCasino
Its actually my preferred way to find good restaurants nearby. What do the
cool kids use for that nowadays?

~~~
bgun
Citymaps. Yelp has a long way to go before I will trust their rating system,
and Yelpers' style of reviews are just painful to read.

~~~
MrBuddyCasino
Citymaps looks decent, the data seems to come from 4Square but the UI is
better (though a little slow sometimes). I also don't trust Yelp that much.

------
_sword
I realize this isn't contributing to the conversation, but it's funny to see
this directly underneath the post describing the immense dropoff in
foursquare's popularity.

~~~
genericresponse
That would be a great way to try and lower the purchase price of a struggling
firm. Dump a bunch of negative PR on the company through 3rd parties
immediately before making your offer.

~~~
chatmasta
Negotiations are based on facts, not perception. M&A revolves around balance
sheets, usage statistics, product strategy, and other metrics based on real
data. The press is clueless and articles are worthless in the long-term.

~~~
taylorwc
Not so much. _Any_ negotiation is heavily influenced by perception and
emotion. What you're describing is more true of a pure financial acquisition,
but way less true of a strategic acquisition. Fear of missing out, which not
generally based on facts, can drive acquirers into a frenzy and drive a
valuation halfway to the moon.

~~~
chatmasta
Good point and nice distinction between financial vs. strategic acquisitions.
But keep in mind there are two sides to the table. If a potential acquirer
unleashes a frenzy of negative press leading into an acquisition, it could be
obvious to the company being acquired, which could negate any points based on
the negative press.

~~~
netrus
Or, if it is a social network, acctually hurt the value of the company to be
acquired. It's certainly a good thing for a social network to have the status
of "the place to be" and not "the sinking ship".

