Can Foursquare Help Microsoft Beat Facebook?
Microsoft (NASDAQ:MSFT) isn’t letting the surprise departure of CEO Steve Ballmer stop it from going through with its restructuring plans. The company is reportedly bidding against American Express (NYSE:AXP) to purchase a stake in social media site Foursquare Labs Inc., according to people familiar with the matter cited by Bloomberg.
Microsoft has suffered from falling behind competitors Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), and Google (NASDAQ:GOOG) in the realm of social media. Recently, investors have been feeling bullish about Foursquare, a social media site that allows users to “check in” when they’re at a certain location like a restaurant or store. The site has now allowed advertisers to target users based on the places they check in to, and that effort at monetization has been highly successful so far.
Foursquare Chief Revenue Officer Steven Rosenblatt said in an interview with Bloomberg that the site’s ads, which were unveiled last month, have been more successful than expected, bringing in three times the revenue the company had predicted. On average, Foursquare users click on or save the ads 15 percent of the time — much higher than the less than 1 percent average engagement users show with mobile ads as a whole.
“I think we’ve proven our business model,” Rosenblatt said to the publication.