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Aug. 4, 2008

Overall, the growing trend of LBMSN (location-based mobile social networking) services offered by wireless providers such as Gy-PSii, Pelago and Loopt is transforming the social networking landscape.

LBMSN is now allowing users to share real-life experiences via geo-tagged user-generated multimedia content, exchange recommendations about specific places, identify nearby friends and set up ad-hoc face-to-face meetings.

"On average, location-based mobile social networking revenues will reach $3.3 billion in five years from now, but business models are likely to be quite different than that is expected," according to ABI Research's principal analyst Dominique Bonte.

Today, modern positioning technologies such as Skyhook Wireless’ hybrid solution combining GPS, Wi-Fi and Cell-ID for improved indoor coverage have been licensed to several social networking vendors.

Many social sites are powered by open location-based platforms such as uLocate’s Where. However, several factors are hindering mass-market adoption of location-based mobile social networking.

Privacy concerns are still a major issue. Small players are struggling to create sufficient brand awareness in a fragmented market. Additionally, the traditional concerns about the cost of data plans also cast their shadow over social networking.

“While location-based advertising integrated with sophisticated algorithms certainly holds a lot of promise, today's reality points to licensing and revenue-sharing models as the way forward for social networking startups to grow their customer base and reach profitability,” added Bonte.

“Recent evidence: the agreements between Gy-PSii and both Garmin and Samsung. Similarly, Loopt has established partnerships with all major US cellular carriers,” said Bonte.

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Source: Signal vs Noise.