Can Foursquare Cash In on Search?

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Foursquare hopes to launch paid search during the next two months. Merchants will be able to promote check-in deals on the platform when users search for local specials, employing the same algorithms currently used on the app's "Explore" tab.

First reported by AdAge today, ClickZ has confirmed the item with two sources close to the situation. One was Walgreens social media director Adam Kmiec, who has spoken with Foursquare about its future plans.

"We are interested in any way we can make our customers more aware of our specials," Kmiec said. "We also think it shows that Foursquare is maturing as an organization."

Up until this development, Foursquare mobile app searches have produced organic results. The same has been true when users tap "Explore" and then hit a "Specials" button before seeing local merchant specials on Foursquare, as well as syndicated deals from Groupon, LivingSocial, Gilt City, ScoutMob, etc. Sometime during June, sponsored results will begin appearing in both cases.

Foursquare is evidently collaborating with past brand partners to create the paid ads platform. During the last two years, it has worked with names like Walgreens, Pepsi, Dunkin' Donuts, Whole Foods, and Radio Shack.

From a longer view, it's the latest business-minded step for Foursquare, which has at least 15 million users and aspires to be a local marketing platform worldwide. Last August, the three-year-old company released a free-to-use self-service platform for business pages. The pages product is available to marketers in 11 languages.

The paid ads development isn't necessarily unchartered territory for the geo-social brand. Nine months ago, ClickZ learned Foursquare was selling custom badges to brands on its platform starting at $75,000. And its mobile distribution deal with the aforementioned daily deals players was unveiled last August. It's been assumed by industry watchers that Foursquare has been getting a sales cut for the converted referrals it dishes out to Groupon, LivingSocial, and others.