Facebook has hired the founders and several employees of two-year-old location-based social networking company Gowalla, killing the Austin-based company and its products in the process, both companies confirmed on Monday.
“We’re excited to announce that we’ll be making the journey to California to join Facebook,” wrote Gowalla co-founder Josh Williams in a blog post. “Gowalla, as a service, will be winding down at the end of January.”
That suggests the imminent end of both Gowalla website and Gowalla’s mobile apps for Android and iPhone, which were recently re-launched as tools that allow users to create collaborative online tour guides to various cities across the U.S.
A Facebook spokesperson provided TPM with the following statement, which is nearly a carbon-copy of Williams’ post, with some added clarification: “We’re excited to confirm that Gowalla co-founders Josh Williams and Scott Raymond, along with other members of the Gowalla team, are moving to Facebook in January to join our design and engineering teams…While Facebook isn’t acquiring the Gowalla service or technology, we’re sure that the inspiration behind Gowalla will make its way into Facebook over time.”
Neither company immediately disclosed the terms of the deal, but Gowalla raised nearly $30 million in financing shortly after launch, TechCrunch reported.
Rumors of the acquisition were first floated on Friday by CNN Money, although at the time, neither company was officially commenting, leaving it ambiguous as to whether or not Facebook was actually purchasing the company or just buying out its talent.
After all, Facebook recently shuttered its own geolocation offering after barely a year. Facebook Places, like the original iteration of Gowalla, competed to some degree with Foursquare, a third independent geolocation social networking company that allows users to “check-in” to a specific physical location using a mobile app. The process earns people virtual points and real-world benefits from merchants as a result.
Foursquare reported 10 million users in June compared to Gowalla’s estimated 2 million users. Facebook reportedly had 30 million people try and use Places, but that marked only 6 percent of Facebook’s total users, a poor adoption rate for a new service by the company.
More to the point, most mobile users aren’t exactly itching to broadcast their locations to their friends and the rest of the Web. Results of a Pew Study released in September found that geolocation apps and social networks are the least popular activity among smartphone users, with only 12 percent of some 2,200 survey respondents reporting that they used the services.
An earlier study from Microsoft, released in January, found better results for the geolocation social networking market, with 51 percent of respondents reporting that they had shared their location through such services, although more than half of those users had privacy concerns about them, Inc. reported.
In light of those results and its failure to effectively compete with Foursquare and Facebook places, Gowalla in September made the strategic decision to pivot its own products away from “check-ins” toward reviews and shared photos.
The takeover also fuels CNN Money’s original speculation that the Gowalla team was hired to work on Facebook’s new Timeline. If geolocation is going to be part of Facebook’s strategy, the company seems to be intent on making a more subtle part of other features, rather than a stand-alone service.
And the move could do even more to shake-up the growing competition between Facebook and Google. Google in 2005 acquired Foursquare’s predecessor, Dodgeball, before eventually killing it five years later. Facebook has been on a talent raid of Google over the past several years as well.
Meanwhile, Google is attempting to compete with Facebook on its home turf with the launch of the Google Plus social network, which has experienced a few notable embarrassments and controversies in its first six months of existence.
As Search Engine Land’s Danny Sullivan opined shortly after the news of the Gowalla talent raid: “Anyone want to put money down on Foursquare getting courted more heavily by Google now? Or perhaps Microsoft? How about Twitter+Foursquare as a unification of the independents?”