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Why the Foursquare Acquisition Story Makes No Sense

So midway through their rocket ship ride to a million users and beyond, the Foursquare team is going to jump off for $100 million and a chance to work at Yahoo! for the next couple of years?


If you believe that, I have a bridge app to sell you.

Sure, Yahoo! may be considering buying Foursquare—in the same way I’m also considering dating Lady Gaga.  Both are being considered very carefully, I assure you.

The problem is, you need both sides to agree to a sale—and Dennis Crowley is a man on a mission.  Whatever you think about Foursquare or the valuation, you have to remember that this is a guy who has essentially been thinking about this app for 8 years, if not more.  Beginning with the launch of Dodgeball as his ITP project, Dennis has been obsessed with the mobile location space for years, and Foursquare is the culmination of all of his work—and it’s taking off.  The first time around, not only could he not get funding for the Dodgeball, but it never really broke past his friends of friends—a small but dedicated userbase.  That was mostly because it was too early in terms of mobile phone technology adoption. 

He wound up selling Dodgeball to Google and proceeded to have a pretty miserable experience there, culminating with Google shutting the service down after Dennis left.  Do you think he really wants to repeat that again?  Given today’s announcement that AOL is shutting down Bebo, the idea that big companies are good caretakers of the brainchildren of entrepreneurs seems less and less believable. 

Nope…  this is not a guy or team that is going to be satisfied with just a million users.  More than the money, which will still be there in a year or two, the team at Foursquare will undoubtedly want to see the service go mainstream.  They’re the closest ones to unlocking the longtail local ad market—bailing now would be completely premature.

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