Should Yahoo Buy Foursquare?

Chris CrumBusiness

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Yahoo may or may not be in talks to acquire Foursquare. Two pretty reputable tech publications (each likely with numerous insider sources) have conflicting reports about this.

TechCrunch has a lengthy report written by two of its veteran journalists, claiming to have multiple sources indicating the two companies are indeed in talks, and that they're hearing the deal is done, but that details are still being worked out. They're hearing $900 million as a possible price. They go into a long history of rumors about Yahoo's and Marissa Mayer's interest in Foursquare and all the reasons it would make sense for Yahoo to buy the company.

Re/code, which has a long history (extending well back into its All Things D days) of reporting on Yahoo's dealings, including breaking the news that Yahoo would buy Tumblr, has a two-sentence story saying, "Yahoo is not in talks" to buy Foursquare according to multiple people familiar with the companies.

A third sentence was added on Twitter:

Re/code's Kara Swisher actually wrote about Yahoo eyeing Foursquare nearly two years ago for All Things D, and this is something the TechCrunch article references. It also acknowledges that while it has multiple sources indicating the talks are happening, other sources have no clue about it.

"Either this is elaborate, bicoastal speculation, or it is happening with only a select circle privy to what is going on," the report says.

Obviously neither company is commenting beyond saying they don't comment on rumors or speculation, as you would expect.

So either Yahoo is going to buy Foursqaure or it isn't. The question of whether or not it should is worth exploring, however, and the TechCrunch article makes a pretty good case for why it would be a good move on Yahoo's part. Long story short, it would give the company more ammo in search, social, and advertising.

Yahoo may be getting ready to go back out on its own in search, as in ending a partnership with Microsoft that currently sees Yahoo Search being powered by Bing. The companies have until the end of next week to figure out how they're going to go forward. They might very well stay together, but they might not. Certain findings have raised questions, but they're just that - questions.

Foursquare has a lot to offer when it comes to local search, particularly on mobile, where Yahoo is focusing the bulk of its efforts.

"A Yahoo acquisition of Foursquare might be one way for Yahoo to bring a trove of local search and location data, and the technology to power them, in-house, along with a team to work on it," the TechCrunch report notes. "Or even with a new MSFT deal, having Foursquare could help differentiate Yahoo better from the other search engine."

Yahoo is very interested in replacing Google as the default search experience in Apple's Safari browser, as it did in Mozilla's Firefox. The better Yahoo gets at search (particularly on mobile, where Foursquare is valuable), the better chance it has of getting such a deal.

In terms of social, Foursquare would give Yahoo another established app to work with in addition to Tumblr - an acquisition that has kept, if not made Yahoo relevant in the space. Foursquare and Swarm would be more potential places for Yahoo to serve ads.

And speaking of ads, Foursquare just launched its own new ad offering called Pinpoint, which it describes as a "full-service advertising solution powered by the world’s most accurate location intelligence available."

Here are the stats Foursquare is touting to market that:

Foursquare already has major brands including Samsung, AT&T, FedEx, Land Rover, Wild Turkey, Olive Garden, Coors Light, and Choice Hotels on board with that.

This offering alone could be an attractive target for Yahoo's advertising business.

Re/code isn't the only one reporting that the two companies aren't in talks, but we don't know who anybody's sources are, so it's pretty much TechCrunch's report versus anyone else's. At this point, we'll just have to wait and see if anything more develops. If it's a "done deal" as the report suggests, we'll probably find out sooner rather than later.

Chris Crum

Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.