Location-based mobile social networking revenue to hit $3.3bn by 2013

Location-based mobile social networking revenue to hit $3.3bn by 2013

Users can share real-life experiences via geo-tagged user-generated multimedia content, exchange recommendations about places, identify nearby friends and set up ad hoc face-to-face meetings.

According to ABI Research principal analyst Dominique Bonte, location-based mobile social networking revenues will reach $3.3 billion by 2013, but successful business models may differ from what many observers expect.

"While location-based advertising integrated with sophisticated algorithms holds a lot of promise, the current reality rather points to licensing and revenue-sharing models as the way forward for social networking start-ups to grow their customer base and reach profitability," says Bonte. "Recent evidence: the agreements between GyPSii and both Garmin and Samsung. Similarly, Loopt has established partnerships with all major US cellular carriers."

New positioning technologies such as Skyhook Wireless's 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, including privacy concerns, the cost of data plans, and the fact that many small players are struggling to create sufficient brand awareness in a fragmented market.

Location-based mobile social networking constitutes a framework within which previously independently-launched location-based services such as search, friend-finder, people tracking and user-generated content find new momentum by complementing and reinforcing each other. Hence, it comes as no surprise that Nokia is moving in quickly with the acquisition of Plazes and the beta launch of the location-enabled Nokia Chat social instant messaging application.

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