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Location-based social networks made their debut in 2009. Since then, several location-based social network platforms have seen explosive growth and acquired a cult-like following amongst end-users. Initially these services attracted end-users based on their game physics, social networking and user- generated content. As they grew and expanded their platforms they captured the attention of companies worldwide who could see the potential value these services could offer as a business tool.

There are two main users of location-based social network platforms. These are consumers (or end- users) and companies. From a company’s perspective, a location-based social network platform looks like the perfect medium to build relationships with new and existing customers. In reality although this may be the case, there are general best practices that should be followed to ensure a successful entry into these specialised communities.

This investigation was prompted by the need for companies to understand what a location-based social network can offer their companies and how companies can go about effectively and efficiently utilising a location-based social network as a business tool. With these two understandings in mind, companies must understand the overall environment they intend to enter. This study seeks to provide companies with a sufficient understanding of the current location-based social network environment to ensure they make sound business decisions regarding whether or not location-based social networks are a suitable business tool for their organisation.

To address this concern, this study employed a qualitative case study and a series of interviews with five New Zealand organisations to provide insights into the new domain of location-based social networks. The case study focuses on the overall location-based social network environment within New Zealand. To do so, four companies from a mixture of industry, ranging from small single shop retailers to companies within New Zealand’s Top 20 (based on market capitalization) were interviewed to gather their current perspectives on location-based social networks. To add perspective, a fifth interview was conducted with an independent crown entity who provided insights on the current privacy environment in New Zealand.

The findings from the case study suggest that although location-based social networks as a domain are still in their infancy, there are significant benefits for those companies that can implement these services in an effective and efficient manner over the long term.

The case study presents a number of unexpected yet intriguing findings on various concepts and topics within the location-based social network domain. These findings cover the personal experiences of those interviewed on various location-based social networks as well as looking at companies that go against traditional practices in their day-to-day business practice. Overall this provides for a sound high- level overview of the location-based social network domain within New Zealand as of November 2010, roughly one year on from the inception and introduction of the location-based social network domain to the Information Systems and Business worlds.


There are several people I would like to thank for making this dissertation possible as well as making my University experience an enjoyable one during the past four years.

Firstly I would like to express my gratitude to Dr. Lesley Gardner who guided me throughout the experience of writing this dissertation. Without her advice and support I think I would still be stuck changing my mind about my research topic.

I am extremely grateful to the five anonymous interviewees who graciously gave up their own time to be interviewed for the purposes of this dissertation. Without you, this dissertation would have been a shambles. Your interviews were an enlightening experience and your insight and wisdom was invaluable. From each of you I took away several new perspectives on business and life that will shape part of my future.

To my lecturers and tutors over the past four years, thank you for the time you invested in me.

To those who progressed through the undergraduate years with me and on to postgraduate study, it has been a great ride. Even though this is my exit stop on the train we call academia, all the best to those of you continuing your journey. One day I am sure we will finally hit the big time with one of our interesting ideas.

Finally to those who have stood by me over the past 22 years, yes that’s you mum, dad and Michelle, thank you. I appreciate and am grateful for all the sacrifices you have made to ensure my happiness.

Don’t think you’ve escaped a mention Jiali. Thank you for your support and encouragement these past five years. Even though I’ve talked a lot of talk, I assure you one day it will be a reality.








of Tables



of Figures


Chapter 1: Introduction


Chapter 2: Literature Review


Chapter 3: Research Methodology


Chapter 4: Location-Based Social Network Exploration


Chapter 5: The Case Study


Chapter 6: Discussion & Framework


Chapter 7: Conclusion


Appendix A: Sources for Literature Review


Appendix B: Ethics Approval


Appendix C: Interview Questions


Appendix D: Compiled List of Known Location-Based Social Network Platforms






Table 1: Location-Based Social Network Parties (GSMWorld 2003)


Table 2: Key Components of Successful Social Network Usage (Kaplan and Haenlein 2009)


Table 3: Overview of interviewees


Table 4: Overview of topics covered in interviews


Table 5: List of Available Location-Based Social Network Platforms in New Zealand


Table 6: Summary of Initial Findings from Case Studies



Figure 1: Location-Based Service Parties


Figure 2: Timeline of Launched Social Network Platforms 1997-2006


Figure 3: Technology Acceptance Model


Figure 4: Model of Qualitative Research Design


Figure 5: Model of Qualitative Research Design used in this Dissertation


Figure 6: Twitter Interface


Figure 7: Foursquare Interface


Figure 8: Facebook Places Interfacce


Figure 9: Loopt Interface


Figure 10: BooYah - MyTown Interface


Figure 11: Where Interface


Figure 12: Yelp! Interface


Figure 13: Brightkite Interface


Figure 14: Gowalla Interface


Figure 15: SCVNGR Interface


Figure 16: Feature and Characteristics of the 10 Largest Location-Based Social Network Platforms


Figure 17: Location-Based Social Network Platform Selection Tool



Advances in Smartphone technology and the convergence of wireless and internet technologies have seen dramatic growth in digital media and user-generated content consumption (Cheong & Morrison, 2008; Siau & Shen, 2003). These advances have created a generation of consumers who are connected to the Internet wherever they go via their smartphone handsets. As companies seek new ways to gain competitive edges, companies from a wide range of industries are investigating new technologies which allow them to engage new and existing consumers via their smartphone handsets (Jansen, Zhang, Sobel, & Chowdury, 2009; Kaplan & Haenlein, 2009b). One medium that has caught the attention companies globally is that of location-based social networks.

Recently there have been numerous studies conducted indicating a substantive increase in social network usage (Goldsborough, 2009; Nielsen, 2010b). One such study stated users of the Internet in the United States spend 22.7% of their total online time browsing social network sites such as Facebook, Twitter, Tumblr and Youtube (Nielsen, 2010b). To put this into perspective, the second ranked use of Internet time was online games, which users spent 8.2% of their online time playing. This growth in usage was not just limited to teenagers. Consumers aged between 25-44 were found to be signing up to social network sites as quickly as those half their age (Kaplan & Haenlein, 2009b; Kim, 2008). The attraction towards Location-based social networks as a business tool for companies is their ability to engage customers in a timely, direct and low cost environment. This makes location-based social networks an attractive medium for companies of all sizes.

Growth in smartphone handset sales is helping drive companies towards business tools such as location- based social networks. Facebook recently stated that of their more than 500 million active users, roughly 100 million were actively (on a recurring monthly basis) connecting to their services via a smartphone handset (Facebook, 2010a; Ricker, 2010). Global Smartphone handset sales for Quarter 3, 2010 consisted of 80.5 million units. This represents a 96% increase when compared to Quarter 3, 2009 sales of 41 million units (Gartner, 2010). The above growth in social network usage combined with the growth in sales of smartphone handsets has led to the development of new mobile-web 2.0 services for smartphone consumers. One such development is that of location-based social networks.

Mobile-web 2.0 is similar to web 2.0. In contrast to its predecessor mobile-web 1.0 which utilised proprietary protocols such as wireless application protocol (WAP) and use-based pricing models, mobile-web 2.0 utilises open standards and flat-rate pricing structures. This surge in smartphone


handset adoption combined with the acceptance of mobile-web 2.0 technologies has allowed the development of location-based social networks to thrive throughout 2010 (Kaplan & Haenlein, 2009b).

For the purposes of this study, a location-based social network will be defined as: Any online mobile service that provides access to existing information from various online social networks that has been filtered selected and compiled taking into account the current geographic location (co-ordinates) of the user, other users and surrounding mobile objects. The service must allow for the creation of user generated content taking into account the users, surrounding users and surrounding mobile objects current geographic location when uploading the content (McKenna, 2008; Raper, Gartnet, Karimi, & Rizos, 2007).

Social networks (Boyd & Ellison, 2007; Danah, Ellison, & Nicole, 2007; Kaplan & Haenlein, 2009a) and location-based services (Junglas & Watson, 2008; Kumar & Moore, 2002; Li & Chen, 2009; Raper, et al., 2007) have received considerable attention in academic and practitioner-based literature. This attention, until recently, was dedicated to viewing the two as separate domains. Location-based social networks as a single domain have received limited attention in academic and practitioner based literature. This is primarily due to the relative newness of location-based social network platforms. Early research investigating location-based social networks is slowly making its way into circulation with the first academic articles being released mid-way through 2010 (Grace, Zhao, & Boyd, 2010). With location- based social network literature in its infancy, this provided me with an excellent research gap in a new and exciting domain. With the aim of contributing towards this literature gap, this research explores how and why companies can use location-based social networks as a tool to engage with new and existing customers. Due to the domain of interest being so new, my intention is to explore these ideas within the current location-based social network environment. I will then discuss the findings that may form part of the foundation for future research into the location-based social media sub-domain.

I formulated three research questions that this study aimed to address:

1. For what purposes could companies use location-based social networks as business tools?

2. How can companies use location-based social network platforms effectively and efficiently (current best practices)?

3. What is the current location-based social network environment within New Zealand?


These questions were designed to provide New Zealand practitioners with an overview of why and how to use location-based social networks as business tools. Providing practitioners with my initial findings would allow them to make more informed business decisions regarding the adoption of location-based social networks in general, and help them to decide which location-based social network platform is the best fit for their company.

The remainder of this study is organised as follows: Chapter 2 reviews the existing academic literature using the above research questions as theoretical lenses to examine a wide range of factors relating to the current location-based social network environment. Chapter 3 explains the research methodology underlining the exploratory case-study-based research approach used. Chapter 4 explores the currently available location-based social networks and summarises the largest ten location-based social network platforms. Chapter 5 provides background on the case study and presents the findings from the five qualitative interviews conducted with local companies. Chapter 6 discusses the key contributions to researchers and practitioners as well as introducing my location-based social network platform decision tool for businesses. Chapter 7 surfaces relevant limitations, proposes future research avenues and concludes this study.


Chapter 1 laid the foundations for this dissertation by introducing the location-based social network domain and formulation of three research questions, which if answered, would help fill the large gap in the existing literature. These three research questions were focussed on (1) why companies use location-based social networks (2) how companies can effectively and efficiently use location-based social networks and (3) what the current environment surrounding location-based social networks within New Zealand looks like. The literature below has been screened based on its relevance to the above research questions.

Location-Based Services

The idea of obtaining data based on a user’s current location originated during the 1960s when the idea of the Global Positioning System (GPS) was born. The first deployment of the GPS was during 1973 when the United States Department of Defence began operating their NAVSTAR GPS (Abbas, Katina, Michael, & Aloudat, 2009; Kumar & Moore, 2002). The initial use of the GPS NAVSTAR was to aid the military by providing positioning to their personnel for use in warfare. These positioning tools could locate other personnel and objects nearby providing a greater level of awareness (GPSWorld, 2003; Spiekermann, 2004). The GPS made its first public debut in 1991 during the Gulf War in which the United States Army utilized GPS services to aide their troops’ navigation of land, air and sea in addition to providing guidance systems for airborne weaponry which allowed for greater accuracy (within metres) over existing guidance systems.

Since 1991, GPS services have slowly made their way into the consumer sector. Apart from a few technical difficulties with GPS during the 1990s due to immature technologies (Spiekermann, 2004; Taubes & Kleppner, 1997), GPS based services today have not changed much since their debut in 1991. Today GPS services are used for activities including guiding emergency vehicles to the exact location of an accident; aiding the rescue and recovery of lost vessels at sea; and by aiding travellers in commuting from point A to point B (Taubes & Kleppner, 1997). The first widespread usage of Location Based Services via a mobile handset came in 1996 when the Federal Communications Commission (FCC) in the United States issued the E911 mandate. The E911 mandates goal was to implement a service called Emergency-911, which would improve emergency services response times to 911 calls made from mobile handsets. It did this by determining an emergency callers current longitude and latitude from their mobile device (Junglas & Watson, 2008). The FCC’s stated goals were to ensure that location


accuracy was within 50-100 meteres for 67% of emergency calls made and within 150-300 metres for 95% of emergency calls made. During 2002, the European Commission initiated a similar directive for mobile communication called E112.

The slow adoption of Location Based Services between the years of 1996 and 2006 (Junglas & Watson, 2008) has been blamed on three primary causes. Firstly, the implementation of infrastructure and supporting systems for more accurate location determining technologies such as A-GPS took longer than expected to design and implement. Secondly, the available location-based services at the time had appalling response times. This made their services impractical, negating any advantages the services offered to end-users. Thirdly, end-users were concerned about privacy issues regarding the use of location-based services (Junglas & Watson, 2008).

Location-based information alone, such as co-ordinates provided by GPS, does not provide much value to end-users. If this location information could be combined with other content, end-users would receive a greater level of value from the service. It was this idea that sparked the creation of location- based services (GSMWorld, 2003). Today, location-based services have evolved with the convergence of three key technologies the Internet, wireless communications and location technologies (Silvia & Mateus, 2003). Fundamentally, the services are the same as they were back in 1991. What has changed is how these services have evolved to combine location-based information with user-generated content.

Location-Based Services offer three distinct formats to receive location-based services. These are pull, push and tracking (GSMWorld, 2003). A pull service is one where the user makes a request to receive location-based information. The user gives permission for his/her location information to be calculated from their smartphone handset and sent to a third party. This third party adds value to the information and then returns the requested information back to the user. An example of a push service would be where a user requests information regarding their local weather forecast. To identify the appropriate forecast to send back to the user, the service platform needs to know the users location. The user will authorise the service provider to access their smartphone handsets location data that will allow the third party to send back the appropriate forecast for the users current location (GSMWorld, 2003). A push service differs from that of a pull service in the sense that the user does not initiate the request for location information. Instead, a service provider prompts the user to allow them to send them information based on their current location. The user must choose whether to accept or reject the platforms request. An example of a push service would be where a user registered to receive a morning weather forecast based on their location each morning at 7:30am. For the platform provider to send the


appropriate forecast, they need to know where the user is located each morning at 7:30am. Since the customer has agreed for the platform provider to access their location information every morning at 7:30am, the platform provider collects the users location information and sends back the appropriate weather forecast based on their current location (GSMWorld, 2003). Lastly, a tracking service is a combination of push and pull services. The idea is that the user requests the location of a particular mobile entity (pull). The platform sends back location data to the user based on their location, and the location of the mobile entity. The platform continuously updates the location of the mobile entity by sending updates back to the user (push) until the user closes the connection or prevents the platform from accessing their location data. An example of a tracking platform would be that of a friend-finder service. For example, a cycling team registers with a platform that allows team members to keep in contact with each other. Every member of the team has given permission to be tracked by the other members of the team. This allows riders to take alternative routes during training sessions and know the location of their fellow riders at all times. This is useful for when riders are wanting to meet up as a group again as they now have access to the location of all team members (GSMWorld, 2003).

There are three main technological approaches to determining a user’s location. The first and original method is the cell-based approach. This approach does not require modification to the users handset or the wireless network (Junglas & Watson, 2008). Examples of cell-based standards are Time of Arrival (TOA) and Enhanced Observed Time Difference (E-OTD). The second method is the handset-based approach. This method uses a Global Positioning System (GPS) chip built into the smartphone handset to determine a user’s current location (Junglas & Watson, 2008). The final method is a hybrid of the two previous methods called Assisted-Global Positioning System (A-GPS). A-GPS works by using the devices last known network information data that has been sent/received by a cell tower in combination with a GPS chip within the users handset to quickly and accurately determine a users location (Wikipedia, 2010a). The hybrid A-GPS method is currently the most commonly used method in today’s environment for determining a location-based social network user’s location.

Location Based Services are built upon an architecture that requires the involvement of several parties in order to provide a complete service to an end-user. Figure 1 depicts the typical parties involved and their relationships.


CHAPTER 2 FIGURE 1: LOCATION-BASED SERVICE PARTIES (GSMWORLD 2003) End users have been divided into two


End users have been divided into two categories. Targets are end-users whose position is asked by

someone else or by a platform (as in the cycling team example). Requestors are those who initiate the

exchange of location data with a third party platform (such as the user who requested their current

locations weather forecast). The Location Based Services ‘cloud’ in the middle of the diagram

represents the compilation of data from the enabling parties and the end-users. Location-based service

enabling parties have been described in Table 1.



Location Technology Providers (LTP)

Manufacturers of the different hardware and software that enable positioning of mobile entities.

Network Operators (NO)

Telecommunication companies that provide the infrastructure for GSM/4G networks.

Regulators (REG)

Those who set the laws, regulations and guidelines regarding how location-based services can be legally implemented.

Service Providers (SP)

Create, implement and maintain the location-based platforms.



Social Networks

The phenomenon of word-of-mouth is nothing new to companies in 2010 (Jensen Schau & Gilly, 2003). The internet has helped revolutionise the speed at which information can be transmitted for virtually zero cost (Godes, et al., 2005). The growth of the internet has helped facilitate the development of specialised consumer-knowledge reservoirs (de Valck, van Bruggen, & Wierenga, 2009). These reservoirs can be found on social network platforms and are one of the leading reasons as to why companies are keen to enter the domain of location-based social networks (de Valck, et al., 2009). Within the literature there are several definitions of social networks given by a range of authors. For the purposes of this study, I will use Boyd and Ellison’s (2007) definition of a social network as a guideline: A web-based service that allows individuals to (1) construct a public or semi-public profile within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system (Boyd & Ellison, 2007).

Social networks as a concept are not new to the twenty-first century. Rather, social networks are built upon the status quo of what the Internet was originally designed for. This is to facilitate the exchange of information amongst end-users. The concept of an online social network dates back to 1979 when Tom Truscott and Jim Ellis created Usenet, a global discussion system that used the internet to allow users to post public messages from anywhere in the world. From there, the 1990’s saw a surge in the popularity of homepages. A homepage was a static website where users could share information about their private life (equivalent to today’s blogs). 1995 saw the launch of Amazon and EBay, which saw the introduction of corporate webpages becoming the status quo. By 2003, the availability of the internet in most first world countries was nearing saturation. This saw the creation of sites such as MySpace (2003) and Facebook (2004), both prime examples of social networks in today’s sense (Kaplan & Haenlein, 2009b). Figure 2 displays a timeline of launched social networks dating from 1997 to 2006.




Each of the social networks shown in Figure 2 allow users to create a personal information page, invite friends and colleagues to access this information page and allow user-generated content such as photos, video, audio and blog posts to be uploaded via the web2.0 landscape (Kaplan & Haenlein, 2009b).

The Web2.0 landscape was a term developed by Tim O’Reilly that highlighted seven principles which demonstrated the core competencies of web2.0 companies (O'Reilly, 2005). One of the core features of web2.0 is that it provides users with rich experiences when compared to web1.0. The potential of the Internet to deliver rich, full-scale experiences was not apparent until Google introduced Gmail to the world, quickly followed by Google Maps. Both of these web applications touted rich user interfaces and equivalent interactivity (O'Reilly, 2007). All social networks today provide their users with rich experiences that not only incorporate multimedia content and rich graphical user interfaces, but also provide applications that cross multiple platforms (O'Reilly, 2007).


User-generated content is a term that is often associated with social networks and web2.0. User generated content is defined as “media content created or produced by the general public rather than by paid professionals, that is primarily distributed on the internet” (Daugherty, Eastin, & Bright, 2008). According to the Organisation for Economic Co-operation and Development (OECD), user-generated content must meet three key requirements in order to be classified as user-generated content. These are: (1) the need to be published on a publicly accessible website or on a social networking site accessible to a selected group of people; (2) the need to show a certain amount of creative effort; and (3) the need to have been created outside of professional routines and practices (OECD, 2007).

The implementation of web2.0 as a common standard has allowed companies to not only present themselves online in a rich and engaging format, but also to establish two-way communication channels via their website and social network platforms (Frey & Rudloff, 2010). The ability to conduct two-way communication (a-synchronous communication) is one of the main reasons why companies want to utilise location-based social networks as business tools.

In today’s environment consumers generally consult online social network platforms before making purchase decisions. Consumers ask for advice and expert opinions from other users, thus engaging in two-way communication. Companies have identified that if they have a presence on social network platforms, that they too can engage with customers by answering questions they may have about a product or provide them with any extra information or feedback that may sway the customers decision (de Valck, et al., 2009). This concept is called attention economy (Davenport & Beck, 2002). Attention economy occurs when brands compete for the attention of potential and existing customers. Social network platforms allow companies to compete within this economy. Companies know that if they do not utilise available social network platforms as a business tool, that they are missing out on their share of the attention economy (Jansen, et al., 2009). Other key benefits from using location-based social network as a business tool include improved productivity, improved collaboration, product improvement and knowledge retention (Baggs & Schmitt, 2009; Kamath, 2009; Tebbutt, 2006).

While companies attempt to integrate location-based social network into their core business strategies, researchers believe many still do not understand how to do so effectively (Kuhn & Burns, 2008; Verna, 2007). According to Smith & Taylor (2004), marketing communication is used as a tool that allows the transfer of information from a company to a customer. Communication in this sense is not intended as a one-way transfer of information. Social networking platforms should not be used as a one-way communication tool where companies constantly sell their product. For effective communication,


companies must be open to two-way communication. Companies must be able to deliver customers communications that contain a mixture of intellectual and emotional value if they want an environment that supports two-way communication between business and customer (Fill, 2005).

The virtual landscapes that you see today are gone tomorrow. There are many different social network strategies that a business can use to engage and build relationships with their customers. Table 2 contains key points that researchers have identified as being important for companies wanting to be successful on social network platforms:


Key Points for Companies


Choose social network/location- based social network platform carefully

There are hundreds of social network and location-based social network platforms to choose from. Companies do not have time to participate on all of them. Therefore choosing the right platform is critical for engaging your target audience as well as using your resources effectively.

Pick a service provider or

Once companies have identified their reasons for using social networks, the next decision is to decide whether to join an existing platform, or make their own platform. Generally, there is no need to reinvent the wheel if a platform idea already exists with a significant user base.

make your own application

Ensure activity alignment

If companies are using multiple social network platforms, it is crucial to ensure that their social network activities across the networks are aligned with each other. Ambiguous and confusing messages across service providers are not a good use of social networks.

Media plan integration

What holds true for different types of social network platforms also holds true for the relationship between company’s social network and traditional media Integration is critical. Companies need to think of the two media as one corporate image, not individual images.

Be interesting

If companies want customers to engage with them (remember engagement is key to effective use of social networks), they must provide customers with a reason to do so one that extends beyond saying you are the best company in the world (nobody likes being sold to on a constant basis). Find topics that consumers like to talk about or what they may find interesting. Create content that fits these.

Be active

To develop relationships with customers, it is always advisable that the company take the lead and initiate the discussion. Social networks are all about sharing and interaction. Ensure that your company’s content is fresh and interesting to stimulate discussion. Nevertheless, remember that it takes two-way engagement to develop relationships. Do not forget to engage with those who attempt to engage with your company.

Be humble

Remember that social networks existed before your companies decided to engage in them. Thus, do not expect that your company know better than those who have been around long before you have. Before using any social network to represent your company, take some time to learn about its history and customs. Only once your company has gained the necessary understanding should you begin engaging with your consumers.

Be honest

Companies should be honest and respectful at all times. Some platforms may not allow companies to use their services. If this is the case, do not test them by attempting to sneakily use their services. Remember that even though your company is behind a keyboard, you are not anonymous when using social networks. Thus, lies generally have a way of coming back and biting your company on the backside at a later point in life.



Social network platforms have come a long way since their early inception. Today location-based social network platforms allow end-users (customers) and companies to maintain a network of strong social ties within a specific geographical context amongst people and companies (Jansen, et al., 2009).

Technology Acceptance Model

The technology acceptance model (TAM) was introduced by Davis in 1986. Davis adapted TAM from an existing research theory called Theory of Reason Action (TRA) which was developed by Azjen and Fishbein during 1980 (Davis, 1986).

developed by Azjen and Fishbein during 1980 (Davis, 1986). FIGURE 3: TECHNOLOGY ACCEPTANCE MODEL (DAVIS 1986)


Over the past 24 years TAM has been viewed as a frugal and authoritative technology adoption theory in the information systems research domain. The TAM is one of the most cited research theories within the information system domain with close to 12,000 citations collectively for Davis’s two original articles (GoogleScholar, 2010). The TAMs objective is to predict and explain usersacceptance behaviour towards a specified technology. The TAM is constructed around six variables. Of the six variables that make up TAM, two are considered key variables. These key variables are perceived usefulness (PU) and perceived ease of use (PEOU) (Davis, 1986). PU is defined as “the degree to which a person believes that using a particular system would enhance his or her job performance” while PEOU is defined as “the degree to which a person believes that using a particular system would be free of effort” (Davis, 1986).


TAM has been applied to a multitude of different computer usage behaviours (word processors, email, geographic information systems and Hospital Information Systems) under a variety of different control factors (gender, organisation type and size) and on a number of different subjects (undergraduate and postgraduate students as well as knowledge workers). The TAM has been extended by various researchers to include a variety of other explanatory and predictive variables (Ridings & Gefen, 2000; Straub, 1994), as well as the introduction of a revised model, TAM II (Venkatesh, 2000). Comparing the TAM to other adoption models concerning exploratory and explanatory power has yielded mixed results (Davis, Bagozzi, & Warshaw, 1989; Dishaw & Strong, 1999; Hsu & Lu, 2004). These studies conducted over the past 24 years have proven the TAMs relevance and rigor as one of the premier technology acceptance theories (Y. Lee, Kozar, & Larsen, 2003).

Existing research in the field of technology acceptance is widespread. Prior research has extensively focussed on the acceptance of products and technology rather than service enabling technologies (Pagani, 2004). Only recently have such studies utilised technology adoption models to view the acceptance of service-enabling technologies such as mobile multimedia services (Pagani, 2004), wireless technologies (Shankar, O'Driscoll, & Reibstein, 2003), on-line games (Hsu & Lu, 2004) and social networks in long distance learning (J.-S. Lee, Cho, Gay, Davidson, & Ingraffea, 2008).

Pagani (2004) found that PU was the most important variable with respect to end-users adopting a mobile service. PEOU was the second most important variable, while other variables such as price and speed of user were ranked third and fourth.

Lee et al.’s study they found similar results to previous research. Again PU was the most important variable with PEOU second. What made this study different from others was that it included the relationship between user’s attitudes and satisfaction levels. Lee et al found that a user’s attitude towards technology was not fixed. The degree of attitude a user displays towards change was determined by the amount of social influence third party users had on the user and the degree of satisfaction their social influences had on the technology as a whole. Therefore, as positive social influences rose, the more likely a user’s attitude was positive towards accepting a technology and vice versa (J.-S. Lee, et al., 2008).



The issue of privacy as related to location-based social network platforms is an issue that is often addressed in terms of how location-based social network platforms intend to keep end-users location information secure (Bisdikian, et al., 2001; Snekkenes, 2001). The issue of identity regarding users of location-based social networks is one of importance. Identity incorporates several aspects such as an end-users name, address and social security number. Of relevance to location-based social networks is the aspect of an end-users physical location. This physical location is deemed a specific attribute of a person’s identity (Barkuus & Dey, 2003; Langheinrich, 2002). A major difference between location and the other attributes of identity is that location is dynamic and thus must be protected in a way that allows for the end-user to benefit from this dynamic attribute while at the same time protecting it from prying eyes.

A study conducted by Ackerman, Cranor, & Reagle (1999) examined people’s attitudes towards online

privacy focussing on how comfortable they were in revealing various information to known and unknown parties. What they found was that people’s willingness to provide information to unknown and known parties via online social network platforms was dependent on what information they were asked to supply and how useful they felt providing this information would be to their use of the social network platform.

A study by Colbert (2001) found that participants were open to giving up their location information to a large group of pre-selected individuals when using friend-finder applications that could enhance the

end-users everyday tasks.

A study conducted by Barkuus & Dey (2003) which focussed on location-tracking services found that a

user’s concern for privacy was much higher when it came to location-tracking applications than position- aware applications. Users of location-based services in general were also found to be less concerned about their locations being tracked, as long as they found the application to be of value (Barkuus & Dey,


Several governments (EU, US, AU and NZ to name a few) have in place privacy laws regulating the protection of users who frequent online platforms. These laws are not specific to the domain of location-based social networks, however; the underlying issues that relate to location-based social networks are not new issues. Rather they are issues that have been discussed for decades by regulators


with the only new addition being the environment they are found within. It is currently up to individual location-based social network platforms to implement their own privacy requirements regarding their end- usersprivacy. Large global companies such as Vodafone, AT&T, as well as social network platforms such as Facebook, Twitter and Foursquare all have internal privacy management systems in place outlining how staff should deal with customers/end-users confidential information (Schiller & Voisard,


Kaasinen (2002) suggests all social network and location-based social network platforms need to inform all end-users of what kind of data they collect, how this data will be used and who has access to it. Platforms need to offer end-users the option to flexibly control the release of any private information; especially information related to their location history. The majority of location-based social network platforms offer their end-users the ability to customise their privacy settings by opting-in and opting-out of various features. This allows end-users to control their level of visibility regarding how open or closed their personal information. Such settings vary widely across platforms, although they all offer a similar level of control currently (Facebook, 2010a; Gross & Acquisti, 2005; Twitter, 2010).

Most location-based social network platforms encourage their end-users adopt a pseudonym to help disguise their identities if they are concerned about identity theft/privacy. The main concern with location-based information is that it can lead to personal identification of the user which makes their pseudonyms useless as a disguise (Bettini, Wang, & Jajodia, 2005). Various anonymous location-based service models have been created with the aim of concealing sensitive information about a user’s location while still providing a personalised experience (Bettini, et al., 2005).

Information Revelation is a term associated with end-users revealing information about themselves on social network and location-based social network platforms. There are three levels of visibility. The first level of information revealed is that of an end-users real name. The second level of information revealed is that of end-users hobbies, interests, previous schools, sexual preferences and current/previous employers. The third level of information is based on the end-users page view options; whether they are open to public viewing or friends and colleagues only. Users need to be aware that there are very high privacy risks associated by having all three layers of visibility available. Gross & Acquisti (2005) Recommend users only have one level of visibility available at any one time to ensure their privacy is kept at a manageable level.


There are two main ways that end-users confidential information can be revealed via a location-based social network. The first is by allowing another party to identity the user’s pseudonymous profile through prior knowledge of the user’s characteristics or traits. The second is via allowing another party to infer previously unknown characteristics and traits about a user that have been identified on a certain network (Gross & Acquisti, 2005).

Recent research conducted by Gross & Acquisti (2005) found that users of Facebook were willing to provide large amounts of personal information on their personal profiles, while leaving the standard privacy settings intact. Most users were unconcerned with maximising their privacy settings to decrease visibility. Based on this information it was discovered that users were willing to provide information online that could expose the user’s real identity, exposing themselves to various physical and cyber risks. These risks are not unique just to Facebook (Gross & Acquisti, 2005).

Several recent news articles have highlighted privacy concerns with online social network and their location-based social network platforms. The first article depicted how social network platforms are being used by thieves to time when end-users are away from home to conduct robberies (Axon, 2010). The second article identified how easy it was to identify an end-user operating under a pseudonym who had checked-in to the same location as yourself (Hickman, 2010).

A recent survey found that 79% of Australians think that sharing their whereabouts on a location-based social network could endanger them to stalkers or home robbery (TNS, 2010).

Smartphone/Mobile Broadband Environment

The emergence of broadband wireless infrastructure offering access to third-generation (3G) and fourth-generation (4G) wireless networks has driven demand for location based services and greater access to multimedia services via smartphone handsets (Junglas & Watson, 2008). Customers wanting access to services such as maps, search engines, video on demand, web browsing and the ability to access social network and location-based social network platforms, have also helped drive demand for smartphone handsets. One fundamental issue surrounding the uptake of location-based social networks is the cost of smartphone handsets and mobile broadband. Currently the cost of handsets is relatively high and this is reflected in penetration rates of roughly 31% in the United States (Corner, 2009; Nielsen, 2010a; Roberts, 2009).


This chapter provided a high level overview of both academic and practitioner oriented literature that is applicable to the location-based social network domain. In particular existing literature was reviewed from the domains of location-based services, social networks, technology acceptance and privacy. These four separate domains literature are implicit in shaping the future literature within the location-based social network domain. Chapter 3 will introduce the qualitative research methodology that guided this study.


Chapter 2 reviewed existing literature within the domains of location-based services, social networks, technology acceptance and privacy. This chapter introduces the qualitative research design methodology that this dissertation drew upon.

Philosophical Assumptions
Research Method

Data Collection



Determining an appropriate research methodology involved revisiting the underlying purpose of this study. Exploring the domain of location-based social networks requires an understanding of not only the technology behind the services, but also understanding why and how companies could use these services. Myers (2009) suggests that qualitative research enables researchers to understand the context in which decisions are made and why certain actions take place. Being able to gather first-hand data through interviews and conversations with local companies would benefit this dissertation by allowing us to understand the current context surrounding location-based social networks. Therefore, qualitative research methods were deemed wholly appropriate in the context of this dissertation.

Having settled on using a qualitative research method, the next step was to select an appropriate philosophical assumption that would guide this research. As this research aimed to explore the domain of location-based social networks in a general sense, interpretive research was a natural fit. It is suggested by Fisher, Hirschheim, & Jacobs (2008) that interpretive research is a valid philosophical assumption when “looking at rich phenomena that cannot be easily described or explained by existing concepts/theories” (p. 167). Due to the exploratory nature of this dissertation, I followed the work of Fisher et al. and employed an interpretive philosophical assumption. This allowed exploration of the domain of location-based social networks with the aim of contrasting the existing academic literature with the findings that emerged throughout this study.


Having selected an interpretive approach, the next step was to choose an appropriate research method. The logical first choice method was that of case study research. Yin (1994) incorporated the notion of a ‘revelatory case’, which he describes as one that is exploratory in nature, involving the collection of rich data in a real world environment. This seemed an ideal fit with the exploratory nature of this study that is corroborated by the lack of academic literature focussing on the domain of location-based social networks as my unit of analysis. Myers (2009) explains that a defining feature of case study research is its focus on asking why and how questions. If we review the research questions of this dissertation we clearly see that questions (1) and (2) are why and how questions. The exploratory nature of these research questions shows a distinct link to the exploratory nature of this study. Unlike action research, Benbasad, Goldstein, & Mead (1987) point out that a case study researcher “has little control over events when the focus is on contemporary phenomenon within some real-life context”. Rather the intention of a case study researcher is to seek out a situation and describe it (Myers, 2009). This further cemented the relevance of my decision to use case study research for this study.

Having selected a case study research method, the next step in building the research method was to select an appropriate unit of analysis. Myers (2009) claims, “business case studies use empirical evidence from one or more organisations where an attempt is made to study the subject matter in context.” (p. 76). Yin (2003) defines a case study as an “empirical inquiry that investigates a contemporary phenomenon within its real-life context”. For this study, the unit of analysis is the high level view of the contemporary phenomenon of location-based social networks. The reason for this is that this study needed a unit of analysis which allowed exploration of (1) why companies use location- based social networks, (2) how companies can effectively and efficiently use location-based social networks and (3) enabled a review of the current location-based social network environment within New Zealand. The unit of analysis that was selected satisfied the three above criteria and allowed the gathering of sufficient information from this new domain.

Having selected the unit of analysis, the next step in building a research methodology required selecting appropriate data collection techniques. When conducting case study research, Myers (2009) suggests using multiple sources of evidence. For the purposes of qualitative research the two main sources are interviews and documentation. Myers (2009) states one of the core advantages of using interviews is the ability to “gather rich data from people in various roles and situations” (p. 121) within the unit of analysis. I set up a series of semi-structured interviews five in total with New Zealand organisations. These organisations were selected as they provided a diverse range of views across a variety of industries, something which Myers (2009) recommends all researchers aim for. Four of the five


organisations interviewed were currently using the location-based social network platform Twitter,

while three were using the location-based social network platform Foursquare as a business tool.

Table 3 shows the individuals who were selected for interviewing and their respective roles. Due to the

newness of location-based social networks, and the small number of interviews, I had to rely on

documentation to help supplement the answers of my three research questions. Documentation was

collected from a wide range of sources including social network and location-based social network

platforms official documentation to technology research reports and blogs that covered the

introduction of location based social networks (Myers, 2009). All documentary evidence that I collected

was assessed based on Scott's (1990) four criterion of: Authenticity, Credibility, Representativeness and




Role in Organisation


Jim Walsh

Business Owner

Icy Treats

John Wilder

Business Owner

NZ Mobile

Jack Walker

Research and Prototyping Manager

Kiwi Air

Jay West

Social Media Marketing Department

Piracy Commission

Josh Winters

Assistant Commissioner

*Organisation and Participant names have been replaced with pseudonyms


Individuals were selected for interviewing based on their knowledge and hands-on experience with

using the location-based social networks Twitter and Foursquare, the degree to which they were

involved in the decision making process to employ these services and past experience with social media

and social networks in general. For confidentiality reasons, the names of the interviewees have been

replaced with pseudonyms.


As small business owners, Jim and John had a lot of freedom when it came to choosing appropriate media for communicating with their customers. Being small companies meant they did not have to satisfy a board of directors. This allowed them to be nimble and capitalise on new opportunities as soon as they arose, and they scrap them if they were not an appropriate fit for their business.

Jack and Jay came from two of New Zealand’s largest companies. Jay came from a company that gave his department a lot of freedom, which aided their ability to deploy services in an effective and efficient manner. Upper management were supportive of utilising new business tools, as they understood if they didn’t innovate in their industry, they would be left behind. Jack worked at a company that had being investigating location-based social network platforms for several years. Jack was part of a team that researched and developed a wide range of hardware and software prototypes for their company and its customers. Jack had plenty of knowledge regarding the many options available in the location-based social network domain and understood exactly what his customers wanted and needed from a mobile handset.

Josh had a thorough understanding of the underlying issues surrounding location-based social networks in New Zealand from his organisations perspective. Even though location-based social networks are yet to see much discussion within his organisation and similar parties, Josh understands the risks involved and potential issues that we are likely to see over the coming years regarding these services.

Based on this understanding of their roles, I believed there was sufficient evidence to suggest that all five individuals were well equipped to comment on the domain of location-based social networks and its current environment within New Zealand.

The interviews themselves were conducted at the organisationspremises or at the University of Auckland Business School. They were conducted face-to-face and lasted for approximately one hour. Interviews were conducted in English, and recorded via a digital recording device where consent had been given. Given the potentially confidential nature of these interviews, there was a need for me to consider any ethical issues involved with conducting the interviews. Ten-Have (1999) suggests researchers need to consider the rights of the participants involved. Thus each participant was assured of anonymity and the right to refuse to answer any question they did not feel comfortable answering during the interview. Interviewees had the right to stop the digital recording device at any stage throughout the interview, as well as withdraw from the interview up to five business days after it was


conducted. This environment promoted an open discussion between the interviewee and the

interviewer, which provided the research with a greater level of depth than would have been achieved

had these ethical standpoints not been considered. Whilst the interviews were conducted over a period

of two weeks, the formats of the interviews were consistent and followed the general topics listed in

Table 4. This consistency meant the interviews were comparable. A detailed list of interview questions

has been included in Appendix C. Table 4 gives a brief outline of the nature of the interview topics.



Current social network usage

Understand how and why companies use social networks

Ease of use of current social networks

Insight into technology acceptance

Perceived benefits of current social networks

Insight into technology acceptance, understand current environment social networks

Privacy issues surrounding current social network usage

Understand privacy issues surrounding social networks

Location-based social network usage

Understand how and why companies use location- based social networks, understand the current environment

Ease of use of location-based social networks

Insight into technology acceptance

Perceived benefits of location-based social networks

Insight into technology acceptance, understand current environment of location-based social networks

Privacy issues surrounding location-based social networks

Understand privacy issues surrounding location- based social networks

Location-based social network environment

Understand current location-based social network environment


Conducting interviews generally requires an innate level of ‘improvisation’, particularly in areas deemed

highly relevant to the research objectives and questions. Myers (2009) supports a semi-structured

approach to conducting interviews stating that the researcher “must be flexible and open to new lines

of enquiry (as) this is often where the added value of interviews lie” (p. 134). Given the qualitative

nature of this study, no attempts were made to quantify the insights obtained from the interviews. My

aim was not to find any statistical relationships, but to improve the understanding of the location-based


social network domain in light of the research questions proposed in Chapter 1 (Hancox & Hackney,


In summary, this study used a research methodology that consisted of: an interpretive philosophical assumption, a qualitative case study and a series of interviews that made up the bulk of the primary data collection. The final research methodology has been depicted below in Figure 5.

Case Study
Case Study

Interviews &



This chapter described the final qualitative research methodology that guided this studies research. Chapter 4 provides an exploratory overview of the current location-based social network platforms available.


This chapter providers an exploratory summary of the ten largest location-based social network platforms available to iPhone end-users as of November 2010. These summaries provide an overview of who founded each of the platforms, what services they currently offer to end-users and companies as well as how much funding they have received from Venture Capital funds and third parties. To complement each of these summaries are three screenshots depicting their various features that each platform provides. Each graphical user interface screenshot is an exact screenshot taken from within the location-based social network platforms iPhone application as of November 2010.

The ten platforms were selected because they represent roughly 90% of the total location-based social network user base and have received the largest amount of Venture Capital funding. To give practitioners an idea of the fragmentation within the location-based social network environment, a compiled listing of all known current location-based social network platforms as of November 2010 has been included in Appendix D.


Twitter “Discover what’s happening right now, anywhere in the world

Twitter was founded and launched in 2006 by Jack Dorsey, Biz Stone and Evan Williams (CrunchBase, 2010h) and currently receives over 190 million monthly visitors (Twitter, 2010; Wikipedia, 2010f). Twitter is a real-time information platform powered by people from all over the world. Twitter lets users share and discover what is happening right now. (Twitter, 2010).

Users access twitter via a broadband connection through a multitude of devices ranging from desktop computers, TV’s and video game consoles to any mobile phone via SMS or 3G data connection. Twitter allows users to post comments, links to websites, photos or videos on any topic they like, with the only condition being it must be 140 characters or less (Twitter, 2010).

Twitter provides companies with a simple tool that allows them to engage more meaningfully with the right audience at the right time. Twitter is suited to companies of all sizes and provides companies with the ability to receive real time feedback regarding a great or disappointing experience with the company (Twitter, 2010).

Twitter offers end-users the ability to attach their current location (using their Smartphone handsets built in GPS device and a service called localeze) to their tweets. This allows other end-users and companies to identify where that user was the moment they sent their tweet giving greater context to their tweets. For example when a user tweets that he’s watching the rugby world cup, this helps users to determine if the user was at the game or watching it from his own home, or from a local bar. This is helpful for finding friends who may be in your vicinity without you knowing, allowing you to tweet at them and meet up for a coffee. By allowing Twitter to access your location, Twitter can also integrate your tweets into third-party applications such as Foursquare and Gowalla (Blog, 2010; Twitter, 2010).

Twitter has currently received $160 million in Venture Capital funding since its launch in 2006. (CrunchBase, 2010h)




(Twitter, 2010)



Foursquare “Check-in. Find your friends. Unlock your city.”

Foursquare was originally founded by Dennis Crowley and Naveen Selvadurai and launched in March 2009 (Wikipedia, 2010c). It took Foursquare one year to reach one million users, another three months to hit two million users and now currently they have just over four million users, with 15,000+ new sign ups a day (Paul, 2010). Their current growth rate is double that of Twitters during its infancy (Wikipedia,


Foursquare is primarily a check-in based platform that incorporates certain game elements into their services. Users share their locations with friends by checking in to various venues, events and cities. Badges are awarded to users who check-in a certain number of times to a certain venue, or check-in to special events such as concerts, conferences and sports games. In addition, users who have checked in the most to a certain venue in the last 60 days are awarded the ‘Mayorship’ of the venue until another user surpasses their total check-ins. Venues which embrace Foursquare have the ability to offer customers discounts and specials to the Mayor, as well as other users who check-in with Foursquare (CrunchBase, 2010c). Foursquare offers companies the opportunity to sign up and claim ownership of their venues. By doing so they can offer Mayor and check-in specials to their customers. They also have access to a dashboard of real time information including who their most frequent customers are, the time of day customers check-in and gender break downs of their customers as well as a lot more features coming soon (Foursquare, 2010).

Foursquare has received $21.4 million in funding from various Venture Capital firms since its launch (CrunchBase, 2010c).

Foursquares vision for the future includes being able to tell users where to go whereever they are in the world, based on their previous visiting habits, likes and dislikes. We want to be able to push venue suggestions to you based on your history which will take into account such characteristics as time of day as well as your friendshabits(Barnett, 2010).




(Foursquare, 2010)



Facebook Places “Who. What. When and now Where”

Facebook Places was announced on August 18 th 2010 to compete against the platforms Foursquare, Gowalla, Loopt and Brightkite. It was designed in-house at Facebook. Facebook Places is currently available in the United States, United Kingdom, Japan and Australia (Facebook, 2010b).

Facebook Places is all about checking-in to locations and sharing that information instantly with your Facebook friends. For example, you go to a show only to find out afterwards that several of your friends were there as well. With Facebook Places, you could have discovered in moments that you and your friends were both at the same show and met up (Facebook, 2010b).

Users have the option to share their location with their friends by checking-in to a location and letting their friends know where they are. When you check-in you can also tag your friends to spread the word to more people, just as you can tag friends into a status update on Facebook. Facebook Places offers a “People Here Now” section where you can see anybody else who has checked-in at your current location. This allows you to meet other people who may share similar interests with you (Facebook,


Facebook Places allows the sharing of your check-in information with third-party applications to allowing you to create travel plans and build other experiences around your location information (Facebook, 2010b).

Users have the ability to turn on/off various features that control the level of privacy they want in regard to their location. For instance users can opt out of being shown in the “People Here Now” section with the click of a button in the privacy control settings (Facebook, 2010b).

Facebook has currently received $836 million dollars in funding from several Venture Capital firms since its inception in 2004 (TechCrunch, 2010c).




(Facebook, 2010b)



Loopt “Find out who’s around, what to do, and where to go”

Loopt was formed in 2006 to build mobile applications that took advantage of location data to help users enjoy the friends, places and events around them. Since then, Loopt has developed a suite of mobile applications consisting of Loopt, Loopt Star, Loopt Pulse and Loopt Mix (Loopt, 2010; Wikipedia, 2010e). Loopt currently has circa 4 million users across all its services as of August 2010 (Fidelman,


Loopt is a mobile social mapping platform that allows users to use the location of their mobile handset to discover the world around them. Users ping their friends to find out what they are doing, share directions and other information on local events and places, as well as discover the best places and events around their city and friends location (Loopt, 2010).

Loopt Star allows users to gain real world rewards ranging from special offers to free music by just exploring the world around them. There a wide range of achievements for users to unlock and earn, as well as earning the Boss status for checking-in to a venue more than times than anybody else (Loopt,


Loopt Pulse has been especially designed for the iPad. It gives users an easy and quick way to keep users in touch with what is happening in the world around them. It offers the majority of features Loopt offers to its mobile users (Loopt, 2010).

Loopt Mix introduces users to the people nearby them that they wish they could meet. It is a great way for those new in town that are looking for a new friend to go to the movies or a concern with. Users create a profile and start mixing and meeting people nearby their current location (Loopt, 2010).

Loopt has currently received $17 million in funding from various Venture Capital firms since its founding in 2005 (CrunchBase, 2010f).




(Loopt, 2010)



BooYah! - MyTown “Use BooYah! To bring new customers into your store and reward them.”

Booyah is headquartered in Palo Alto, California and is dedicated to creating new forms of entertainment bringing together elements of the real world and the digital world. Booyah was founded in 2008 and has three core products: MyTown, Nightclub and Incrowd (CrunchBase, 2010a).

MyTown is the world’s most popular location-based social game with over 3.3 million players. The goal of MyTown is to purchase as many of your favourite real world stores and hangouts as you can. The game works by levelling up your character, which allows you to unlock rewards, create powerful items and earn enough cash to buy your favorite locations in the game world. There are various levels throughout the game, each requiring a set of different tasks to be completed or items to be purchased before levelling up occurs.

Booyah announced that their next update they would be adding even more levels that will make all those items users have collected more worthwhile. MyTown recently introduced a new feature that allows users to scan real world product barcodes via their Smartphone for points and promotions from various advertising partners. This currently sets MyTown apart from other location-based social networks as it offers companies a unique way to interact with their customers. In the pipeline is the ability for companies to craft their own challenges such as scavenger hunts and offer special real world promotions and discounts directly through MyTown (BooYah!, 2010; TechCrunch, 2010a, 2010b).

Companies will have access to a wealth of information on their consumers purchase data, interests and how they interact with competitors(TechCrunch, 2010b).

Booyah is currently available in all countries that support the Apple App Store and Google Places. (BooYah!, 2010). Booyah has received $29.5 million in funding from various Venture Capital firms since 2008 (CrunchBase, 2010a).




(BooYah!, 2010)




Where, Inc. was founded in 2004 and claims to be North America’s leading location-based media company. Where Inc provides two core services: Where App/ and Where Ads. Both platforms are currently only available in the United States (Where, 2010)

Where, Inc. claims they have over 3 million active users. Where’s Mobile App and website help users to discover, save and share local places by posting the best local information to their usersfingertips. Where integrate savings, specials and other offers from local merchants to their end-users. Where’s App is perfect for end-users to easily discover and explore their surrounding environment. Anything from the weather, news and restaurant reviews to helping users find the closest coffee shop, cheapest petrol, traffic updates or movie show times all from the one application. Users can save and manage their favourite locations via the innovative feature called “Placebook” which sorts users saved locations by proximity (Where, 2010).

Where Ads is a hyper-local advertising network which claims to have revolutionised the way companies advertise online and via mobile applications. Where Ads offers improved performance for better results by engaging consumers through location-relevant advertisements. This allows small companies and large brands to advertise campaigns that are optimised for their target audience through the use of banner ads, special offer coupons and store opening alerts within the Where App itself (Where, 2010).

Where, Inc. have received a total of $18.5 million in funding from Venture Capital firms since their inception in 2004 (CrunchBase, 2010i).




(Where, 2010)



“Yelp is the fun and easy way to find, review and talk about what's great - and not so great, in your area.”

Yelp was founded in 2004 to help users find great local companies. As of August 2010, more than 38

million people had visited Yelp in the past 30 days, and users had written more than 12 million local

business reviews. 94% of Yelp reviewers were aged 23 or older as of January 2009 (Yelp, 2010a).

Yelp is an online urban city guide that helps its users find cool new places to eat, drink, shop, relax and

play. Yelp was created to with the intention of allowing users to identify great local companies and

spread the word to other users. Yelp works via relying on its users to rate and review local companies to

help people new to the area make decisions that are more informed. Yelp offers the benefit of giving

users access to a variety of real people reviews in one-easy-to find location. Business owners can set up

accounts allowing them to offer discounts as well as upload photos and privately message their

customers. On top of this, Yelp offers users a variety of social networking tools such as the ability to add

friends, groups, events and discuss a wide range of topics via community forums (Yelp, 2010b).

Yelp allows companies and advertisers to pay for advertisements. These are identifiable by an orange

background that clearly states to users that it is a sponsored result. Advertisers gain the right to add

greater levels of media including a slide show and video to their companies’ page. All reviews of

companies regardless whether they have a sponsored result or not are all treated in the same manner.

Thus, there can be no manipulation of reviews by those who paid for a sponsored page (Yelp, 2010b).

Yelp is currently only available to end-users in the United States, Canada, United Kingdom and France.

Yelp has plans to slowly expand their services around the globe over the coming years (Yelp, 2010b).

Yelp has currently received $56 million in funding from various Venture Capital firms since its founding

in 2004 (CrunchBase, 2010j).




(Yelp, 2010b)



Brightkite “Unlimited group texting. Free. Everywhere”

Brady Becker, Martin May and Alan Seideman founded Brightkite in 2007. In April 2009 it was acquired by the social network Limbo who changed its name to Brightkite (CrunchBase, 2010b; Wikipedia, 2010b). Brightkite (Limbo) was then acquired by No Sleep Media soon after (CrunchBase, 2010e). Brightkite currently have circa 2.2 million users as of August 2010 (Fidelman, 2010).

Brightkite was originally focused on allowing users to broadcast their locations, locate bars, clubs and restaurants and coordinate with their friends via group text functions. Brightkite were the pioneers of the check-in before any other platform offered the concept. These days the check-in is viewed as a commodity.

As of September 14 2010, Brightkite changed their focus to that of group texting including the ability to message location information and images to a group of friends in one efficient and cost effective manner. The focus is now the ability to seamlessly share information via your phone to your social networks and private handpicked groups. The ability to share a user’s location with friends and social networks remains a core focus, as does the ability to locate users at correct venues (BrighteKite, 2010b; CrunchBase, 2010b).

Brightkite offers companies the ability to place heavily targeted advertisements and offers which are pushed to Brightkite users based on their current location (BrighteKite, 2010a).

Brightkite has currently received $28.83 million in funding from various Venture Capital firms since Limbo was founded in 2004 (CrunchBase, 2010e).




(BrighteKite, 2010b)




“Keep up with your friends, share the places you go, and discover the extraordinary in the world around you.”

Gowalla was founded by a company named Alamofire in 2007 and launched at the beginning of 2009 by

Josh Williams and Scott Raymond (CrunchBase, 2010d; Wikipedia, 2010d). Gowalla currently has circa

450,000 members (Singer, 2010).

Gowalla is primarily a check-in based service that helps end-users keep up with their friends, share their

favourite places and discover the world around them. Users can upload photos, comment on places

friends go and share highlights from their life (Gowalla, 2010). Gowalla is known for their promotions.

These promotions are based around a series of virtual items dropped around certain geographic areas

or at events. Users who check-in around these areas have the ability to pick-up these virtual items and

exchange them for physical items at Gowalla partnersstores. Gowalla offers end-users the ability to

create ‘trips’, which allows them to link up to 20 related spots. Gowalla can then feature these trips to

all Gowalla users in the vicinity. Users that create trips are rewarded with a special status and icon

identifying them as the creator of the trip.

Gowalla recently released three new tools for companies. The first tool, ‘City Pages’ displays the most

popular locations and activities going on within a city on a page. The second tool, ‘Verified Companies

and Venues’ allows business to take control of their venue page, add important details such as contact

details, addresses of other venues, and create custom messages for customers. Soon companies will

also be able to offer deals to their customers. The third new feature is the ‘Stamp Calendar’, which

allows companies to take advantage of custom passport stamps that users can obtain by checking-in to

their venues. These stamps are intended to be scarce. To help limit the number of custom stamps,

Gowalla has a self-serve platform where companies must reserve a date to obtain a custom stamp. Once

all the dates or gone, companies must wait until the next allocation of custom stamps (Rao, 2010).

Gowalla has currently received $10.4 million in funding from various Venture Capital firms since its

founding (CrunchBase, 2010d).




(Gowalla, 2010)



SCVNGR “SCVNGR is a game about going places, doing challenges and earning points

SCVNGR was founded by Seth Preibatsch during his freshman year at Princeton in 2008 after which he took a “leave-of-absence” to pursue SCVNGR full time with the goal of building a game layer on top of the world(SCVNGR, 2010b).

SCVNGR, as you may have already guessed is primarily based upon “scavenger hunt” challenges. Originally, the company focussed on providing an enterprise-grade mobile game building platform. The platform, which is currently used by over 1000 enterprises including Harvard, Princeton, MIT, the U.S Navy and the City of Boston, allows enterprises to build challenges for their end-users and reward them for their accomplishments. These enterprises use SCVNGR for a wide range of activities from team building exercises to orientation events to social outings. Enterprises are able to deploy these games at minimal cost and they can be utilised on any mobile phone without the need for end-users to download applications to their handsets (SCVNGR, 2010a; SVNGR, 2010; TechCrunch, 2009).

In early 2010, SCVNGR launched an application for consumers that aimed to merge their already powerful enterprise gaming platform with their new casual mobile game platform for consumers. The result was a unique real-world gaming experience. SCVNGR is all about going places, completing challenges and being rewarded for doing so. The mobile app gives end-users points for checking-in to locations, where the more friends you check in with, the more points you get. End-users can also earn points (more than just checking in) by completing challenges, which can range from taking a picture of your current location and uploading it to solving a location-based riddle that a shop owner created. These challenges exist everywhere, and on average take less than six seconds to complete. Anybody can add challenges whether it is shop owners or just frequent visitors to a specific location. SCVNGR’s long-term goal is to continue building their game layer on top of the world.They aim to make every trip outdoors more fun by engaging in a game world (SCVNGR, 2010a, 2010b; TechCrunch, 2009). SCVNGR currently have 500,000 mobile users (Van Grove,


SCVNGR has currently received $4.79 million in funding from several Venture Capital firms since its founding (CrunchBase, 2010g)




(SCVNGR, 2010a)



Features and Characteristics of the 10 Largest Location-Based Social Network Platforms

of the 10 Largest Location-Based Social Network Platforms FIGURE 16: FEATURE AND CHARACTERISTICS OF THE 10



Chapter 4 presented an exploratory summary of the ten largest location-based social network platforms. This section will present my initial findings from the case study of the location-based social network environment within New Zealand. These findings include the insights and perceptions from the owners and employees of the five organisations interviewed and will be of great benefit to other New Zealand practitioners. It should be noted that the views expressed in this section are those of the individual interviewees and not necessarily those views shared by their employer or company.

Smartphone/Mobile Broadband Environment in New Zealand

As of November 2010 the cost of a Smartphone device with capabilities of running those location-based social networks covered in Chapter 4 range from $399NZD for a Sony Ericsson X10 to $1399NZD for the new iPhone 4. As of December 2010 Vodafone and Telecom are running Christmas specials which sees an entry level handset retailing for $199 heavily discounted (TelecomNZ, 2010b; VodafoneNZ, 2010).

Mobile broadband plans which are required to provide customers with access to location-based social networks range from $1 a day for 10mb (casual rate), $12 for 120mb (Cheapest pre-paid package) all the way up to $79.95 a month for 4gb of data (TelecomNZ, 2010a).

New Zealand has three major telecommunication providers. These are Vodafone, Telecom and 2 Degrees. All three networks offer high speed 3G mobile broadband and voice services, as well as subsidised handsets at similar prices. Current government regulation should see cheaper voice and data prices for customers over the coming years (CommerceCommission, 2010).

Currently available Location-Based Social Networks in New Zealand

Table 5 identifies those location-based social networks from the top 10 listed in chapter 4 that are currently available to New Zealand end-users and companies as at November 2010.


Available Location-Based Social Network Platforms









Jim Walsh is the owner of Vino (a pseudonym), a leading beverage retailer in the Auckland region. Vino has one physical retail store and an online store, both which sell beverages from a wide range of local and international suppliers. Vino currently uses the following social network and location-based social network platforms: Twitter (357), Facebook (1,330), YouTube (13,605) and Foursquare (173).

Vino is a social network success story. From August 2008 to August 2009 Vino increased their sales across both stores roughly 4000%. The majority of this growth is linked to Vino’s adoption of a wide range social network platforms during this period. Vino has seen success on a global scale with many international customers tuning into to their video blogs and spreading their user generated content via social network and location-based social network platforms. If there were one defining factor that lead to Vino’s success it would be the following

“It’s all about engagement” – Jim Walsh

Walsh admits that it is a lot easier to sell beverages via location-based social network platforms than it is to sell insurance. However, he believes that regardless of product, if a company wants to succeed via these platforms, the company must engage with their customers via two-way communication. What this means is that the company does not use location-based social network platforms as a medium to hard sell a product. To utilise these platforms to their fullest, companies must engage in two-way dialogue. Companies must be willing to accept that not all customers will agree with their thoughts. If a company has experienced this type of feedback from its customers, then the company has successfully engaged in two-way communication. Walsh admits as a customer he mutes the sound of certain TV adverts. He does this purely because he does not like to be yelled at via a one-way communication source while a company attempts to sell its product. The same principle applies to location-based social network platforms.


“I switch the sound off on Harvey Norman adverts and they’ve just not got me at all. I just won’t go into their stores as all. Because I just don’t understand, I don’t want to be shouted at above normal kind of television noise. So I switch, put it on mute or change the channel and I look at my ipad or something like that, or laptop. And so it’s not got me at all” – Jim Walsh

Companies must realise that once they engage in two-way communication with customers it can be a very time consuming process. There is a lot of time management and investment that goes into conversing with customers effectively and efficiently. Because these platforms are instant, companies can find out what customers are thinking very quickly by asking the right questions. This instant tool is seen as a double- edged sword. As quickly as companies can find out information about their customers, companies can also quickly receive negative feedback that can spread like wildfire. Several companies have found this out the hard way and suffered significantly due to mishaps and comments made from staff on their companies location-based social network platforms. Generally those companies who received negative experiences on location-based social networks failed to follow Kaplan & Haenlein's (2009b) principles. Companies must ensure that they have the resources to know that once they start engaging their customers that they can continue the engagement long term. As soon as companies lose that engagement with customers, the customer is gone and it is a lot harder to re-engage them.

An important factor for being successful on location-based social network platforms is influence. If your social media team/employee has influence, then you are going to have much greater success than a social media team/employee that has a minimal level of influence on each of the location-based social network you aim to utilise. Walsh suggests that any company looking to utilise location-based social networks needs to either: (a) hire somebody who already has influence, (b) find those with influence and send them products to review for you or (c) have some very smart and well-connected employees who can obtain influence in a short period of time. If there is one thing that you cannot have enough of on a location-based social network, it is influence on other users.

Walsh’s impression of location-based social networks such as Foursquare is that they are incredibly easy to use and he states they have to be; as soon as you have a service that requires any more than three or so steps to check-in or purchase a product, you have lost the customers attention.


“Foursquare is incredibly easy and it’s got to be, you’ve always got to work to the lowest common denominator and you’ve got to get the ease of use factor in there. Foursquare is incredibly easy, it finds the location for you pretty much. You just select and then check-in and it tells you who’s around you, who’s checked-in before, any tips and it supplies you all that information” – Jim Walsh

Walsh’s thoughts on Foursquare Mayorship specials are that they are exclusionary in nature. Walsh believes that if you really want people to come back and check-in to your premises you must offer the same level of discount to all. Regarding the redemption of Mayor/Foursquare specials, Vino experienced mixed reaction from their customers. Walsh estimated that only 70% of their customers who checked-in to Vino actually redeemed their discount. Walsh recognised some customers would travel all the way across town, check-in and then be too embarrassed to claim the discount.

It is just human nature. Humans do not like asking for discounts and stuff like that.” – Jim Walsh

Foursquare have had issues in the past with users falsely checking into locations without physically being at them. When I asked if Walsh believed this to be a core issue he responded with the following

“If a person is that engaged with your business that they want to be mayor so badly, that’s a good side right? I do not see that being negative at all. I think that that is positive and you need to target them as a company to keep them happy and make sure that they are engaged and interacting with you because they are going to be an advocate for you” – Jim Walsh

Brand advocates are critical to successful social network implementation. Word-of-mouth is still a fundamental means of getting your product out there. Getting users on Facebook, Twitter or Foursquare to like and endorse your product is essentially a personal recommendation. Your customers are telling everybody electronically that they approve your product, which is a hugely influential thing. If your friends recommend something to you, you are far more likely to take this on board than a traditional advertisement trying to recommend you a product. Thus, the more advocates you capture, the less work you need to do in the sense of spreading word about your product. In fact, if you have a great product, it will practically sell itself-online.


“If you have 4,000 people following you on Twitter and 4,000 following you on Facebook, that is 8,000 and then you’ve got all these other people using these tools that are posting your message out there on these platforms that go to all of their friends. It’s self-seeding and sometimes you have to touch these different touch points in media and advertising to get them to come to you” – Jim Walsh

Vino has seen continual growth in the uptake of check-ins to their retail store via location based social network Foursquare since they adopted the platform during 2009. However, Walsh does not see the service picking up a huge increase in local users in the near future. The main reason for this is due to the pricing of smartphone handsets in New Zealand. Until handsets are available to everybody at an affordable price - $99 – we won’t see massive uptake of services such as Foursquare. Once handsets reach an affordable price,

“If you want everybody to start using these and start using these services you’ve got to have a handset that’s available to everybody.” - Jim Walsh

The next issue is convincing everybody that there is real value to using such services. Since these services are still very new, the long-term value of these services will only be recognised over time. It is really in the hands of the social network developers and handset manufacturers/telecommunications providers whether these services have long term stickability or not.

What was interesting to Walsh was the array of customers who were using Foursquare as a platform. Many were the types of people you would never think would be potential users of a location-based social network. Walsh recalls several experiences where he would get people throughout the week come into the store that he did not know, yet they knew who he was. They did not follow Vino on Twitter or Facebook, yet here they were checking-in on Foursquare. Walsh found that many users initially would check-in “off the grid”. Customers did not want Vino to know everything about them immediately; there seemed to be an air of mystery about them. As soon as the customers identified with Walsh or the other staff and identified them as being trustworthy with integrity, they then started to open up and check-in allowing, staff to find out who they were.


“because people did come in, because they’d put up a relationship with you, they don't want you to know everything about them immediately, there’s sort of a kind of mystery that they want to hold onto about who they are and it has that kind of whole Facebook privacy issue. And then as soon as they’ve kind of identified with you, that you’re okay, trustworthy with integrity, then they start opening up and they check in and you see who they are.” – Jim Walsh

Considering the privacy of users of location-based social networks, Walsh believes we are currently in a good and stable environment. However, if this landscape was to change and governments were to leverage your personal information against individuals, then we would be entering a very dangerous environment. Users need to be educated about privacy. Many currently take privacy for granted, however we must weigh up that the majority of users who sign up currently are pretty tech savvy and thus have an understanding about what they are getting themselves into. A few users sign up naively and are not aware of the amount of personal information they are sharing. It is these users we must target more so than the average user in terms of further education. As soon as these services enter a school environment where peers are pressuring others to sign up and them, we have reached the stage where education to protect our citizens is necessary.

Walsh recommends companies considering implementing location-based social networks should ask themselves the following two questions: (1) how can I implement this without it costing me a lot of time and cash and (2) how can I implement this without losing focus on my primary business objective. Location- based social networks can distract staff/owners making them lose sight of their overall goals, something that occurs with many small companies that attempt to use these services. Before diving in, ensure you take some time and do some research into whether these services will actually benefit your overall business objective.

And I looked at Twitter for the first time and all of these geolocation and social media tools, and sat down and thought how do I use this? How do I implement this in my business without it, a), costing me a lot of time and a lot of cash and me losing my focus on my primary objective, because I think that’s a lot of it for people. They look at these things and that can distract them. And the first time I looked at Twitter I thought ‘how the hell am I going to use this’?” – Jim Walsh


As for the future of location-based social networks, Walsh sees several key avenues. For sports venues Walsh believes the ability to check-in at a venue and then have the ability to socialise and chat with other fans will be huge, especially for sports that have long games such as cricket, baseball or ice hockey. Social news is another huge domain. Twitter made headlines by breaking the Hudson River emergency landing. Users on Twitter knew about the landing well before emergency services knew anything about it. The future of news is social; real people, real pictures, and real time. We are currently moving towards a world where mobile technology and services such as Foursquare may one day allow for the purchase of products. Walsh would be happy for customers to walk into his store and buy products via Foursquare or Facebook currency, knowing that the cash will end up in Vino’s till at a future date. As for the development of location-based social networks for retailers and other companies, only time will tell. Once smartphone handset penetration has reached its tipping point is when the real innovations in these services will occur.

John Wilder is the owner of Icey Treats (a pseudonym), a leading iced confectionary retailer in the Auckland region. Icey Treats currently use the following social network and location-based social network platforms: Twitter (4,820), Facebook (12,846), YouTube (10,136) and Foursquare (2,130).

As of November 2010, Icey Treats had registered one of the highest numbers of check-ins via Foursquare for a New Zealand company since Foursquares launch. 375 individuals had checked-in to their location a total of 2,130 times. Wilder attributes this success to Icey Treats being a physical location, a gathering point. Utilising a location-based social network platform such as Foursquare was seen as a natural fit for his company.

“Because I’m a location, I’m a gathering point. And for those things, you know it was very relevant to have a geo-location social media thing. They [location-based social networks] are relevant to the time of our life. People wanted us to be reachable on and off line, and a way for us to get rich by our customers, was to open to those sorts of platforms. So now, and the more we have, the more possibility we give to our customers to interact and talk to us” – John Wilder

When asked about Foursquares longevity, Wilder responded that its time is nearly up. Why? Because of Facebook. In New Zealand Facebook already have over one million end-users. Foursquare has circa five thousand users. With the launch of Facebook places in New Zealand imminent, Foursquares days are numbered.


What is interesting about Icey Treats is that they do not offer discounts or specials to their customers who check-in via Foursquare. Icey Treatsphilosophy is against the use of traditional advertising or location- based social networks to advertise their product. Part of this philosophy includes their decision to not offer their customers discounts or specials. Icey Treats uses location-based social networks as a medium to engage with their customers and share knowledge. Those that engage with Icey Treats know what the company stands for and these are the customers Wilders is passionate about engaging with. Icey Treats do however run a Mayor special which entitles the Mayor to a free Icey Treat.

“Honest we don’t encourage consumers. I don’t want you to spend. I’m so strange, it might look like a paradox. I don’t advertise that you need to buy an ice-cream because I give discount. I’m in it to tell you that I exist, and 9 out of 10 you already know. And if you were engaged with me you will know why I exist and that’s what matters.” – John Wilder

Location-based social networks have allowed Icey Treats to acquire a cult-like following within a very short time frame. The location-based social network platforms Icey Treats utilise have worked like word-of- mouth on steroids for the company. These platforms helped spread word of his company faster than traditional word-of-mouth ever could. Wilder states that for this to occur a company needs to have an excellent product or services that customers are willing to recommend to their peers. If your company has a poor product or service, no matter how much time and money it puts into location-based social networks, customers simply will not engage. Those companies with an excellent product will be able to amass a following of brand ambassadors similar to that of Icey Treats in a very short period of time.

“Social media is an extension of the communication department. Social media is your real life. If you’re failing everywhere in your fucking life, how do you ever believe you’re going to be a star on social media? Who do you think is going to ever follow you, or listen to you, or believe in your, or share what you do? If you fail you fail. If you are no good, you are no good….Because they struggle in real life, and therefore they will struggle in social media. It’s not that if you go in social media you will find new customers, no way my friend. If you are an average business, that offers an average service, with an average customer service experience and an average product, what the fuck you want?” – John Wilder


Location-based social networks are perceived to be very cheap to set up. From experience Wilder states they do however require a significant amount of time and effort to continually run and engage with your customers. For a small company such as Icey Treats this can actually work out to be quite expensive. Companies need to understand the ongoing costs associated with location-based social networks. While they may seem a cheap medium to implement, they become costly when producing content and engaging with customers over long-time frames.

Wilder believes that to embrace social networks means companies embrace sharing. To embrace sharing requires companies and end-users to be the opposite of private. Wilder sees no privacy issues regarding the use of location-based social networks. In Wilders eyes, location-based social networks were created by people, for people, that do not care about privacy. As long as end-users/companies do not spam other end- users/companies and abuse their generosity then there are no issues. If end-users are concerned about privacy then they should be more worried about banking staff respecting their privacy. This is where the real privacy issues lay in Wilders eyes.

Jack Walker works within one of several research and development divisions at NZ Mobile (a pseudonym), a leading telecommunications provider in New Zealand. NZ Mobile is currently using the following social network platforms: Twitter (8,816).

Walker states ease of use of location-based social network platforms is paramount. If they are not easy to use, end-users will put it right down for that reason. Even though they may be easy to use, the platforms also must have value attributed to their use. Just because a service is easy to use does not mean that customers will use it.

Ease of use is absolutely paramount, and that keeps getting shown all the time. If you can make it easy to use, and simple to use, people will pick It up quicker and start using it” – Jack Walker

NZ Mobile’s social media team have all had personal location-based social network experience before running NZ Mobiles Twitter stream. They learnt the pros and cons from their own experience.


I mean the people we use, for example, in social media in our organisation, have street cred. They blog, they’ve been on Twitter by themselves, they have learnt the pros and cons.” – Jack Walker

According to Walker one of the good things about location-based social networks is that they are very

accepting and forgiving, within reason. Those companies that continue to display the same standard

marketing diatribe via one-way social network communication will learn very quickly that location-based

social networks are not traditional media. Walker likens it to walking into a pub and yelling at people while

not wanting to listen to what pub patrons have to say back. Users of location-based social networks will

very quickly disengage those companies attempting to engage via one-way communication.

“That’s like walking into the pub and yelling at people, but not wanting to listen. You learn very quickly,

you’ll get carried outside and told to fuck off. And there are a number of companies still doing that on

Twitter and Facebook.” – Jack Walker

Walker expressed his concern about the number of companies utilising location-based social network

platforms that really have no reason to be using them. Several companies are using location-based social

networks because they are in the in-thing. Walker recommends that companies who have no reason to use

location-based social networks do not use them for the sake of using them. They will cause more harm than


Walker sees New Zealand’s main issue in regards to uptake of location-based social networks as being one

of density. When you have cities internationally, that have well over 8 million citizens, there is a lot of value

in those citizens having access to a location-based social network. Auckland on the other hand with only

circa 1.4 million citizens will receive little value from these services in comparison. Also not helping New

Zealand’s cause are location-based social network platforms that require a smartphone device produced

after 2008. The most popular device connected to NZ Mobile’s network currently is the Nokia 2280, a

device that was released circa 2002. In fact, any mobile device that was released before 2008 will not be

able to take advantage of location-based social networks. Until smartphone prices for handsets produced

after 2008 become more attractive to the average person, most will continue using their current handsets.

Once handset pricing reaches a more affordable level, the next issue will be convincing customers there is

value in owning one.


“We’re a small country with low population base relatively, no matter how much we’d like to think that we’re not. You know our biggest cities what, 1.4 million people, wow! That’s like a suburb somewhere. So how can you bring in location services that account for that broad urban sprawl like Auckland, and that is of value?” – Jack Walker

Currently location-based social networks are seen as “geeky”. Convincing the average consumer to use one will be a hard task unless there is some real value in doing so. This is something location-based social network platforms and telecommunication providers need to work together on. These issues are the current stumbling blocks New Zealand must overcome before greater demand of location-based social networks develops.

The next issue from a telecommunication provider perspective that needs to be tackled before location- based social networks become more popular is the cost of cellular coverage in New Zealand. The idea of location-based social networks may sound appealing. However, outside the larger metropolitan zones, cell coverage becomes very expensive in locations that do not have a high population density. For example you will find users of location-based social networks just outside of Rotorua who decide they want to use their location-based social network while checking out the mud pools only to find there is no 3G coverage in this area. The cost to install a cell tower in the middle of nowhere for the occasional user to use currently outweighs the net benefit a telecommunication provider would receive by installing greater coverage. There are also resource consent issues within New Zealand and residents who complain that by erecting the towers that we are destroying the New Zealand landscape. These are just some of the challenges telecommunication providers face in providing sufficient infrastructure to allow a significant uptake in location-based social network usage.

The other issue in New Zealand is coverage. People are going ooh cool how do I get to the back of Rotorua to go and see this bubbling mud, damn there’s no fucking coverage, so that’s a little bit. It’s a challenge in this country, you know and everyone says you should have coverage everywhere. It costs a lot of money. Why would I put a cell site in the middle of National Park, coz then you've suddenly got a whole lot of people protesting that says you cannot ruin our National Parks like that. And a whole lot of people bitching, probably the protestors, because they can’t get coverage so that they can bitch. You know I want to Tweet my bitching, I need cellphone coverage, but you're not allowed to have cellphone towers because it’s environmentally polluting, you know from a visual perspective. And that’s a really hard, how does a tourist country like New Zealand provide that?” – Jack Walker


NZ Mobile has had the technological infrastructure in place for several years to implement a location-based social network of their own. NZ Mobile chose not to implement these services, as there were not enough end-users in New Zealand at the time to make it worthwhile. The other issue was that NZ Mobile could see no clear business models that could monetise these services. In today’s environment location-based social network platforms and telecommunication providers still have trouble monetising their services.

I mean personally I think we should have implemented 8 years ago, and tried to get it kicked off. The phones already are all turned onto it, but the business model, or the issue at a Telco level, no one’s made any money out of LBS. My argument is if you look at a direct revenue stream sure, fine, the problem with Telco’s is they’re still not used to working with indirect revenue streams and eco-system models” – Jack Walker

As location-based social networks require mobile broadband to work, there are associated data costs that consumers must be aware of. The majority of customers do not currently understand these associated costs well enough. This is seen by the large amount of media reports recently that tell the story of a user who heads overseas uses their smartphone exactly like they do back home only to get hit with a huge bill on return. Walker believes this is an issue that mobile phone manufacturers and telecommunication providers need to be working on together. How can we accommodate the need for the customer to use location-based social networks while educating them on the issues of data usage and associated costs.

A current issue Walker raises for mobile phone manufacturers is that of improving battery life of smartphone handsets. Most smartphone users have a wide variety of services enabled at any one time, from Wi-Fi to 3G to Bluetooth and Location Services (GPS). All of these services require a lot of energy to constantly be on. Thus battery life of smartphone handsets is an issue for end-users who want to utilise multiple services at a time. The average smartphone in today’s market will last at most an entire day’s use with all these services switched on. If location-based social networks become main stream services, the average user is going to demand better battery life from their handset.

“I notice some of the stuff in the droid market is starting to look at, like there’s a thing called battery extender, which is what I’ve got. It’s probably on I-Phone as well, which says when I get to a certain level I'm going to turn off Wi-Fi. I'm going to turn off GPS, I'm going to turn off Blue Tooth, all of those sorts of things. And you prioritise which one, so I tend to personally, on this, turn off GPS last, only because I'm intending to use a number of different location based services” – Jack Walker


With the current fragmentation of the location-based social network market, Walker expects to see many of the current players drop out or merge over the coming years. Will some of the current location-based social network providers become geographic-based, focussing on one geographic market alone? Walker sees real potential for a New Zealand company to create a location-based social network platform specifically for the New Zealand market. Being a small country with low population base and large urban sprawl, New Zealanders require a different sort of value from location-based social network platforms than what is currently on offer.

you've got all those start-ups, you'll get a lot that will drop out. Then you'll get a lot that’ll merge, a lot of them obviously started with some sort of IP, or even patent, where their business model is to get more. So, you know it’s, how does it consolidate down to a number? Will some of those be geographic based? I’d like to see New Zealand come up with something themselves, New Zealand’s got an interesting differentiator compared with some countries.” – Jack Walker

Walker points out the potential for manipulation regarding location-based data. Already services such as Google Maps have been at the centre of data manipulation rumours. One of these stated that Google Maps was routing UK tourists through smaller villages rather through the most direct routes during their trips. It was suggested that villages had paid Google for this data manipulation thus increasing the town’s economy, although some residents of these smaller towns claimed Google was destroying their lifestyle by directing tourists through their village.

Walker’s views on “push” services in regards to location-based social networks is that platforms must offer the ability to “opt-in” and that they must have some real value to them. Push services can be very intrusive. Therefore, users need to have the ability to customise the level of push services they receive if they chose to receive them at all.

The issue of end-usersprivacy is an important one in Walker’s mind. Currently just because an end-users data is private in one country does not mean it is private in another country. For example if I am in Italy using a location-based social network and my data is being routed through an Italian network, is my data private? This kind of concern brings in a lot of other issues surrounding end-usersprivacy not only on a local scale, but also on a global scale. Currently there is a sense of paranoia regarding the use of location- based social networks such as Foursquare or Twitter amongst those not using the platforms. There is a perception that just because an end-user checks-in to their office building, it means they are open to


having somebody burgle their house. Walker believes there is the possibility of illegal acts occurring based on this sort of information, but that it is no different from an opportunistic thief seeing you leave your driveway and attempting to break in once you are out of sight. End-users need to be wary of these facts and the possibility of other end-users abusing their location data before engaging in any of these sorts of services.

“Yeah I think there’s some paranoia about, particularly location based services like I will Tweet that, or I will Facebook, Foursquare, but I’m at Mojo, cool. That means I’m not at home, so smash and walk in. What they don’t know is my wife is at home, or they go oh Christ. There is some paranoia on that, not having been bitten, I’m not shy yet and I think there is opportunity, very good opportunity for a whole lot of illegal acts to occur as a result.” – Jack Walker

Walker believes that current location-based social network platforms terms and conditions are not appropriate in their current formats. The current terms and conditions provided by all platforms are in a language that nobody can understand. Terms and conditions are currently too long and meaningless to the average end-user. Platforms need to spell out in plain English exactly what their terms and conditions are actually stating. They should also not exceed one page in length. Anything longer and end-users switch off, agreeing to the platforms terms without reading what they are really getting themselves into.

“Yeah the problem I have with the information is you get, in the end you get tied down into T’s and C’s and no one reads T’s and C’s. You know Microsoft have you read this before you install, oh agree, and it’s all about I’m refusing to take responsibility, I want you to take the responsibility. As a result you’ve clicked it, now I’d like to see at some stage, in court for that to be challenged.” – Jack Walker

As for the future of location-based social networks, Walker is looking forward to the Rugby World Cup in 2011 that is being held in Auckland, New Zealand. The cup will bring in many higher socio-economic tourists, the kind who travel with iPhone, iPad, and Android handsets. There is a huge opportunity for local companies to take advantage of location-based social networks and really test the water to see the potential of the services when density and mobile handset penetration are not such an issue.


Jay West works in the social media department of Kiwi Air (a pseudonym), a leading Airliner operating locally and globally. Kiwi Air is currently using the following location-based social network platforms:

Twitter (50,000+ across multiple feeds), Facebook (51,984), YouTube (1,819,548), Flickr, Linkedin and Foursquare (772).

Being a small airliner on a global scale, Kiwi Air has to be innovative to stand out. Being an early adopter of location-based social networks has allowed Kiwi Air to do just that. Kiwi Air adopted Twitter as their main social network platform (prior to Twitter offering the ability to attach location data) back in 2008. The initial idea was to just test the platform and engage with their customers. Since then, Kiwi Air’s use of Twitter and other location-based social network platforms has grown extensively. Currently Kiwi Air has the largest following of any New Zealand based company on Twitter. Much of that growth came during 2009 when Twitter was the buzznew platform.

Before Kiwi Air engages in a social network platform, they ensure they have the resources and the knowledge required to engage with the platform, rather than trying to retrofit to the platforms requirements.

One of the major benefits of online media such as location-based social networks is that Kiwi Air can tailor their services directly to their audience.

“With traditional media like TV and print you are getting a lot of reach (at a substantial cost), however you never know exactly who is on the receiving end. With location-based social networks we know exactly who we are engaging with online. Sure we may be getting a niche, but the engagement is much deeper in a relationship context and significantly cheaper than traditional mediums.- Jay West

West perceives location-based social networks to be relatively simple to use. The younger generations will find location-based social network platforms very easy to embrace, as most of them have grown up surrounded by technology. Those older generations who had worked blue-collar jobs may find the idea rather foreign, however they can certainly dive right in and pick it up quickly. West does feel there is a barrier to entry that some people will shy away from: that is fine as location-based social networks are not for everybody.


“It’s an interesting one, because I think it’s so much on a case by case basis. If you were in the advertising world and you were a 50 year old father, then I’d say it would be quite easy to embrace. But if you were someone who had been working in more of a traditional or blue collar environment, then this may seem rather foreign. I think that’s, you know the younger generations, because they’ve sort of grown up with these things, embraced them much easier. You know so I think there’s a level of entry, or a barrier that some people are quite willing to overcome, where other people just sort of shy away.” – Jay West

Kiwi Air’s perceived benefits of location-based social networks are that they have allowed them to create and foster a high level of customer service, something that is critical in their industry.

Twitter for example allows customers to provide positive and negative feedback in a timely manner. Without services like those that Twitter or Foursquare offer, customers who may have had a great experience had know where to voice this apart from their immediate circles. Now Twitter allows these customers to spread the word to a much wider audience.” – Jay West

When Kiwi Air spots a trend on Twitter they can act instantly on that trend and either capitalise on the opportunity or mitigate any fallout.

“Every service industry lives and dies by word-of-mouth” – Jay West

West believes the use of location-based social networks is based upon education and common sense surrounding what you can, cannot, should and would do. However, some black and white rules are still needed to ensure people do not over step the line, and when they do, they are dealt with in an appropriate manner. Kiwi Air have a set of general guidelines that they use with respect to content that they are allowed to post. They also have guidelines surrounding how and when to moderate other customer’s posts.

In general if the content is positive, neutral or negative it will stand. Once the content starts to become offensive, derogatory or totally irrelevant, that is when Kiwi Air will step in and moderate.” – Jay West


For example, Kiwi Air has had cases of racist and bigoted comments from customers/users that were instantly moderated. There have also been political comments that as an airline it is best to stick clear of. If a customer says we do not like something, that is totally fine, because in general Kiwi Air believe if a product or service is generally good, you will have natural brand advocates jump in and defend your brand.

Kiwi Air views location-based social networks as a cross-boundary tool which has resulted in a company wide use of location-based social networks, rather than individual business function such as marketing.

Because of this, we had to work closely with our legal, online, marketing, PR and executive team to draft some rules that pull in existing policies across all business functions.” – Jay West

Kiwi Air is the first Top 50 Company in New Zealand to launch (2010) a highly successful campaign via Foursquare since its release. Kiwi Air’s motivation for implementing a location-based social network comes back to their focus on innovation. West states Location-based social networks seemed to be the buzz of 2010. So we thought why not give it a go. When asked about why Kiwi Air chose Foursquare, West responded the decision was purely based on growth rates of the location-based social network platforms in New Zealand and abroad. Kiwi Air felt that if they were going to jump into this new and exciting domain, selecting one that would still be growing in six month’s time would be their best choice.

Foursquare offers Kiwi Air access to key user data metrics such as total check-ins, check-ins per day/location and many more. West sees these metrics as a justification of their investment decision into Foursquare.

Senior management still want to know the key metrics, the return on investment etc. These metrics also allow us to monitor, listen and respond to what is going on. Location-based social networks allow us the ability to tweak many settings. The metrics then allow us to compare between settings and find the most optimal mix. So yes the metrics Foursquare provide a valuable to us” – Jay West


West is careful to point out that these metrics were not a deciding factor in the selection of Foursquare as their preferred platform. Customer engagement is still our main reason for using Foursquare. Kiwi Air offered a reward based campaign to customers who checked-in to various Kiwi Air locations around New Zealand. What Kiwi Air found was that these small incentives returned very positive word-and-mouth results for very little cost.

On the topic of false check-ins, West notes that Kiwi Air has not been a victim of abuse as of yet. To claim the reward users still need to physically be at the location and show their boarding pass. However, West believes as soon as these services become more mainstream, and monetary incentives grow from a wider range of companies, that companies will start to see individuals taking advantage of such-loop holes while they exist.

I know that apparently if you check in from a place outside of where it actually is, then you won't get them issued apparently, you know. But I don't know the logic behind that, so I don't know. And I think that’s what everyone says upfront, and like people would be able to cheat this quite easily. I think in general most people probably, and it’s probably because it’s still early and there’s a lot of goodwill with 4 Square. As soon as it becomes a place where people think yeah money, and take advantage of it, like Twitter, like Facebook, spam, and deception become much more likely. At the moment it’s still kind of at early adopter stage, where there’s a lot of goodwill, it’s kinda fun, people are sharing, they’re very positive. I think if it gets to a point when you go people can make money out of this, or people can deceive people, all of a sudden you get people jumping on trying to do the things that you've just mentioned. So I don't know how that’s going to change as the growth happens.” – Jay West

On a recent trip to New York, West experienced the full value a location-based social network platform such as Foursquare could offer its end-users in denser cities. When West checked-in to various locations he was buried with hundreds of tips from other end-users, a stark contrast to New Zealand’s current environment. With penetration rates in New Zealand still relatively low, the value is not there yet until smartphone penetration rates increase. Having embraced smartphone technologies and existing social network platforms for several years, West said embracing the personal use of Foursquare was a breeze.

The value was already there given many of my friends and colleagues were also early adopters of such technologies and services.” – Jay West


West believes that those who are not already adept with social media, platforms such as Foursquare could feel like an invasion of their privacy as well as still being manual in the sense of physically checking-in to locations. West currently sees the manual check-in as another barrier to entry for new users. Getting into a routine of checking-in to every location takes time to develop. West would love to see Foursquare implement an auto-prompt for check-ins with the ability for auto check-ins to your favourite locations.

“I guess on the other hand if you weren’t already adept with social media in terms of Facebook, or My Space, or you're a blogger, I think 4 Square would seem like (a) quite an invasion of your privacy, and (b) very manual in terms of actually having to use it. But the people that have embraced Smart Phones, and those other social media platforms, and loved the ease of use to connect to your friend, find it quite beneficial. So yeah I think it’s one of those things that people either love and embrace, or kind of can’t really see through” – Jay West

As for the future of Foursquare, West would like to see greater privacy options provided to end users. Currently the option of sharing with everyone or no one is too rigid. There are times West would like to share his location with his friends, but not his colleagues.

“From my perspective I would like to see privacy levels at greater, a greater scope or range. At the moment it’s like share with everybody, share with no one. For me that doesn’t serve as many purposes. You know like I'm sort of young, in my mid 20’s, late 20’s, and I’ve got my colleagues on 4 Square, but I also have friends. If I'm out at the pub on a Friday night at 10.00 pm, I’d like to share with a certain amount of people, but not necessarily with my boss that I'm at the pub, you know? So it’s kind of like how can you take a leaf out of Facebook’s setting, but be pro-active about making people aware of them, rather than changing them without people knowing, to be able to give people more freedom. Because I think people go actually I don't want everyone knowing where I am, and that’s one of the big things that 4 Square has to overcome to actually solicit new people, to acquire new people. It’s that it’s kind of like stalk book or, you know stalk, you know you can find out where everyone is all the time. That’s kind of weird to a lot of people, you can see that, and there’s this continuum I think in social media, it’s always, it’s going more and more towards the right.” – Jay West

With an increase in users adopting their real names as handles on location-social network platforms comes an increased authenticity to the services. This increased authenticity however comes with associated privacy risks. Where users once used anonymous handles, the uptake of real name handles means users


need to be far more aware of what they make available to these platforms. West believes younger generations will not think twice about sharing such personal information on these platforms due to the fact they want the ease of use and the tailored services. With advertisers looking to “push” adverts to end-users based on their preferences, West believes platforms need to offer end-users the ability to opt-in and opt- out of such services.

“Social media, you know whether it’s My Space or Twitter, they all started off with Avatar names, or handles is what we call them. But now people are much more inclined to use their real name, and I think that brings an element of authenticity. But to some people it brings an element of risk because of things like credit card fraud, or just the fact that their employers or anyone can find out about you if they really wanted to” – Jay West

Kiwi Air has a strict privacy policy that applies across all business functions and services. West admits there is an element of risk surrounding the use of third party social network platform such as Facebook, who have a chequered past when it comes to privacy. Kiwi Air’s robust policies ensure that if any third party service were to overstep the line regarding privacy, that Kiwi Air would re-evaluate their involvement with the third party and inform their customers about any issues.

When asked about Facebook Places imminent launch, West replied that he would like to use the platform as an individual first and get to know its positives and negatives on an individual level before suggesting to Kiwi Air that they jump in and implement its services. Again, it comes back to understanding the platform and ensuring you have the appropriate resources to adopt the platform rather than attempting to retrofit the platform into Kiwi Air’s environment.

West believes that mobile carriers such as 2 Degrees can help bring smartphone handsets to the masses by making them more affordable.

The day that iPhone and Android handsets become entry-level handsets is the day that real growth in location-based social networks will occur. The amount of knowledge sharing and productivity that can be gained from using such handsets is staggering. The Internet was the first huge step towards information liberation. The smartphone is the second step towards it.” – Jay West


West states we are seeing corporate environments uptake these handsets as the opportunity cost to them

of not having smartphones is huge. All that’s left is the leisure phone market which is slowly making the

move across as prices of smartphones come down.

The quicker we can have these [smartphone handsets] becoming standard, the better it will be for everyone” – Jay West

Overall, West explains their Foursquare campaign was a key learning environment for the company. The

challenge will be for the company to determine what tangible and intangible rewards work best in this

environment. There are many large companies out there that just cannot see the direct relationship

between location-based social networks and their bottom line. Those companies will find the costs to get

involved with such platforms once they realise the relationship, will be much higher further down the track

as they must hire people externally to run their services. Having already experienced the ups and downs of

the platform, Kiwi Air are already several steps ahead of their competitors (and other New Zealand

companies), ready to capitalise on the opportunities available once location-based social network

penetration levels increase over the coming years.

Josh Winters is an assistant commissioner for the Piracy Commission (a pseudonym), an independent

crown entity established under the Piracy Act.

Winters explains that there are three main parties involved with a location-based social network. There are

the companies running the location-based social network platforms, the companies that use the platforms

as business tools and the individual end users. These three parties are similar to those noted by GSM World

(GSMWorld, 2003). The commission bases their perspectives and any interventions regarding piracy

depending on which party or parties are involved.


Winters states that there are three main groups in society when it comes to level of privacy concern.

At one end of the spectrum, we have the privacy fundamentalists. They do everything they can to protect their privacy. They feel very strongly about having their privacy protected and will only utilise services that give them full control of their privacy options. At the other end of the spectrum, we have those unconcerned with privacy. They could not care less about privacy. This group takes no sensible steps in protecting their own privacy and do not care for the option of controlling their privacy. Moreover, in the middle you have the group that has some concerns about privacy but would still like some control over their settings. They are willing to give up some privacy settings for more tailored services but will not hand over everything unless they see the value. However, if there are no options of control regarding privacy settings, then they are not too fussed and will still risk their privacy to extract value from social network and location-based social network services.” – Josh Winters

These groups are split with roughly one quarter of society at each end of the spectrum and the remaining half sitting somewhere in the middle. There are no distinct age group trends within the groupings with each having a broad range of age groups.

The issue of platform providersmain offices being located off-shore does raise some legal issues in terms of jurisdiction and practicalities in terms of how a regulator within New Zealand may be able to influence the behaviour of a platform provider or company in another jurisdiction. In an attempt to limit these issues, the commission attempts to co-operate with other similar commissions internationally to ensure that good outcomes are consistent and international privacy laws can be achieved regardless of the physical location of the party’s head offices.

The commission believes any company that interacts with an individual from a business perspective has certain responsibilities under law to be transparent about their services. The commission encourages companies to go over and above whatever they are obliged to do by law as a matter of best practice.

Not only should these platform providers ensure they are transparent, but they also need to ensure that their terms and conditions are understandable to consumers, while at the same time not acting outside the boundaries that their customers would expect.” – Josh Winters


The commission advises that platform providers do not experiment on their customers. The commission has gone on record with ten other commissions to state that it is not good enough for companies to run these types of experiments with userspersonal data and privacy. The commission fully supports innovation by these companies, however they need to be transparent with their users and ensure they understand what they are getting themselves into before proceeding with their experimentations.

Even though the technologies surrounding the use of location-based social networks are relatively new, the underlying privacy issues surrounding them have been around a long time. For example, privacy issues surrounding location-based social networks are very similar to those of following people in a public place or following somebody in a taxi and taking photos of them.

“In Korea there have been a number of cases where people have used their mobile phones and certain services that they have downloaded to them and secretly tracked an old friend or former partner. This act has been made a crime now punishable by prison sentence.” – Josh Winter

In the United States, all handsets produced within the last five years are required by law to include GPS tracking chips, supposedly for the dispatch of emergency services. Obviously there is concern that the government is using or could use those GPS chips for surveillance purposes.

“There is a neat little term that one famous commentator on these issues coined. Something along the lines of, it used to be in surveillance follow that car, now you say follow all cars” – Josh Winters

Winters believes we are moving into a new era where ultimately, society is going to lose a lot if we lose the idea that you cannot go about your normal business without worrying about whether you are being tracked or not. The commission hopes that society will be able to get the best of both worlds, while remaining in control of their privacy. Winters suggests however that regardless if things start that way, the various powerful interests (governments/companies) will not let it end up that way. Those powerful interests may start under the guise of empowering individuals, giving them choices, but essentially, they will want control for commercial profit. Similarly governments will want to piggy-back on these services as they want social control and want to know what is happening within society at all times.


The commission sees no point in the long detailed and wordy legal statements and the terms and conditions that all platform providers engage in. If providers are going to genuinely spell out what they are doing, they need to communicate it in a way that the average user can understand. They also need to give the user greater choice over what they want to agree to and what they want to disagree to rather than the current blanket yes or no.

Winters believes education definitely has its place in the social network and location-based social network environment. The main issue lies around whose job it is to provide the education and what level of education should be provided.

“Lets face it; busy people who want to use the Internet don’t want to become an expert on the Internet. There are some things that it is not appropriate to educate them about. However the resources should be there if they want to find out more” – Josh Winters

Evidence suggests that most end-users’ do not read a platforms Terms and Conditions, and when they do, they do not understand them. To get around such issues, the commission could implement such a law that requires all websites to declare certain sections of the Terms and Conditions. This idea has been implemented in the food industry where all suppliers and required by law to include specific information regarding various content levels in the items in a standardised format. This way, if there is an issue that a particular end-user is concerned about, they can easily find what they are looking for. This concept called layered notices has been researched by several commissions in the OECD. Currently this concept has not been cemented in law in any jurisdictions.

The commission has recently reviewed research suggesting that by giving end-users too much choice about privacy can lead to a diminishing result. Six issues per page/notice have been found to be the magic number. Anymore and end-users only pay attention to what they know and understand.

Ultimately the commission believes there is a fine balance when managing consumersprivacy risks in relation to location-based social networks. As a regulator Winters states we cannot put all the emphasis on individuals making decisions for themselves and exercising a choice. Nevertheless, at the same time we cannot put all the emphasis on the platform providers and companies to making the correct decisions for end users and customers. Finding an effective mixture is what the commission aims to explore.


We do not want to stifle innovation and we do not want to stifle companies. However, our duty is to protect the consumer’s interests.” – Josh Winters

Thus our goal is to find an appropriate balance for these age-old privacy issues in modern technological environments.

This chapter presented a wide range of relevant findings related to the location-based social network environment at the time the interviews were staged and the documentation was collected (October/November 2010). These findings were gathered from five organisations across a wide range of industries and organisation sizes. This provided a great level of depth and breadth than had we focused solely on one organisation or one industry. Chapter 6 provides an in depth discussion which answers the three research questions this study was constructed upon.


Chapter 5 described the case study and presented relevant findings regarding the location-based social network environment. These findings were extracted from interviews with a selection of interviewees, from a range of small and large companies, across a wide range of industries that utilise location-based social networks. This chapter discusses my initial findings, presents a framework for companies looking to utilise location-based social networks and concludes by exploring the limitations of this study and proposing future avenues for research centred on the domain of location-based social networks.

This study aimed to explore the new domain of location-based social networks and provide practitioners with relevant findings to allow them to make better-informed business decisions regarding the implementation of location-based social networks within their organisation as a business tool. In the introduction I proposed three research questions, which if answered, would enhance our understanding of the new location-based social network domain. These research questions were focused on (1) why companies would use location-based social networks, (2) how companies can effectively use location-based social networks and lastly, (3) how the current location-based social network environment within New Zealand is currently shaped. These research questions were addressed through a case study of four New Zealand based companies and one independent crown entity. These companies were selected based on their current and previous usage of location-based social networks with four of the five companies using the location-based social network platform Twitter and three were using the location-based social network platform Foursquare.

The case study revealed a core underlying reason why companies would use location-based social networks as a business tool. This was apparent across four of the organisations interviewed that were currently utilising social network and location-based social networks as business tools. This underlying reason was the ability to engage with new and existing customers. The four companies interviewed saw customer engagement as the primary reason why they were utilising various social and location-based social network platforms. This agrees with the findings of Frey & Rudloff's (2010) earlier research into social networks.


Kiwi Air stated that Twitter had allowed them to foster a high level of customer service, something critical in their industry. Being able to provide customers with answers and feedback to their questions in a timely manner has been of great help to not only their customer service levels, but also providing customers with a medium to voice their positive and negative feedback towards the airline in a timely manner, something that previously took days or weeks to take place. This ability to work with customers and improve product delivery has been previously investigated by several researchers (Baggs & Schmitt, 2009; Kamath, 2009; Tebbutt, 2006).

Vino noted that their engagement with their customers via social and location-based social network platforms helped lead them to achieve a 4000% increase in sales through their retail and online stores during the period from August 2008 August 2009.

Other extracted reasons why companies could use location-based social network platforms included:

tailored sales and marketing (Vino), the ability to offer discounts/rewards (Vino, Kiwi Air), real time customer service (Kiwi Air), generation of brand advocates (Vino, Kiwi Air, Icey Treats) and the ability to spread word-of-mouth faster than traditional means (Vino, Kiwi Air, Icey Treats) which was revolutionised by the introduction of the internet (Godes, et al., 2005).

With respect to how companies can effectively use location-based social networks as a business tool, a concept several researchers have previously investigated (Kuhn & Burns, 2008; Verna, 2007), two core underlying themes were extracted from four of the five the organisations interviewed (Vino, Icey Treats, NZ Mobile and Kiwi Air).

The first theme was ensuring your company has the resources (money, time and experience/knowledge) to implement and continually run a location-based social network platform before your company makes a final decision re adopting these services. Even though location-based social network platforms are relatively cheap in comparison to traditional communication and marketing mediums, they require a significant amount of resources to ensure that they are run effectively and efficiently.


Companies must understand that engaging in two-way communication with customers can be a very time consuming process due to the real-time nature of the platforms. Companies need to understand that they set their customers’ expectations regarding engagement levels by their own use of the platforms. For example a company that is constantly creating content every few hours will be expected by their customers to respond to questions within the same time frame. Likewise, a company that creates content on a daily basis will be expected to engage customer’s questions on a similar time frame. Thus large companies will want to invest in a dedicated team (internally or externally) whose job it is to run their platforms based on the companies desired goals. For companies that do not have a large amount of resources available, they should look towards less frequent engagement with their customers to ensure they do not disengage their customers via lack of expected engagement. Ultimately the amount of resources required will depend on the size of the company and your company’s expected platform goals.

The second theme was ensuring your company does not engage via one-way communication, a concept explored by (Smith & Taylor, 2004). This means not hard selling your product to your customers while ignoring their opinions and feedback. Companies have to be willing to accept feedback, whether positive or negative that customers may have. Companies must be willing to take on board the feedback and suggestions provided by customers and pass them on to the appropriate channels within the company.

Other themes relating to effective and efficient usage that were extracted included ensuring companies do not lose sight of their primary business objectives; ensuring companies did sufficient research and due diligence on the platform prior to implementation; and ensuring that companies have a great product or service before engaging with customers.

The case study provided significant insight into the current location-based social network environment within New Zealand as of November 2010. Three common themes were extracted from the findings. These were ease of use of the location-based social network platforms; smartphone handset penetration rates and pricing; and the issue of privacy.

The theme of ease of use of the platforms was common across four of the organisations interviewed (Vino, Icey Treats, NZ Mobile and Kiwi Air). All four found that Foursquare in their view was very easy to use from a usability standpoint. This is vital for the success of any platform. This idea is backed up by several researchers who also found perceived ease of use as a factor that rated highly regarding a users technology acceptance (Y. Lee, et al., 2003; Pagani, 2004). Jim Walsh of Vino stated as soon as any location-based


social network platform required users to perform more than three steps to check-in or purchase a product, the platform had already lost the users engagement. Foursquare currently requires users to conduct two steps to check-in to a location. These steps are very intuitive and thus add to Foursquares perceived ease of use.

The issue of smartphone handset penetration was common across three of the organisations interviewed (Vino, NZ Mobile and Kiwi Air). Until smartphone handset pricing becomes more affordable to the average New Zealander, New Zealand will not see any significant growth in the location-based social network domain. Interviewees believed handset prices for smartphones needed to penetrate the entry level $99- $199.00 range to see significant uptake of location-based social network services. Currently entry-level smartphone handsets that can utilise the main location-based social network platforms retail around $399. Costing issues were also raised in regard to mobile broadband charges and billing methods. These findings are in line with those of (Corner, 2009) and (Roberts, 2009) who found handset pricing and mobile broadband costing a significant barrier to entry to the location-based social network domain for end-users.

On the topic of privacy, the Piracy Commission states there are three classes of society, each with a different perspective on privacy concerns. On one end of the spectrum we have the privacy fundamentalists who will do everything they can to protect their privacy. On the other end of the spectrum is the privacy unconcerned group, who do not care about privacy. In the middle is the largest group of people, who have some concerns regarding privacy, but are willing to sacrifice their privacy if there is value in the services.

Considering general privacy concerns related to location-based social network platforms, four of the organisations interviewed (Vino, NZ Mobile, Kiwi Air and Piracy Commission) had similar views which agreed that greater awareness and education surrounding end users privacy was needed, however the level of education and awareness needed to be tailored to cater for different knowledge levels of end- users. As for whose job it was to provide such education and awareness there were mixed responses. Some believed the platform providers, in a language that was understandable to all, should provide a basic level of education and awareness to their end users. Some believed that education regarding privacy was needed within the school environment, especially since a lot of these platforms were being adopted by children as young as seven and eight years old. All interviewed believed location-based social network platforms needed to offer end-users flexible options to control their level of privacy. This follows (Kaasinen, 2002) thoughts from his existing research. Josh Winters states the there is merit in having a standardised, layered approach to privacy, similar to what the food industry has implemented by requiring all


manufacturers to include, by law, specific content on their packaging. John Wilder believed that there was no issue of privacy due to the fact that the whole idea of embracing social network platforms was to embrace sharing, and that to embrace sharing required the opposite to being private. Wilder believed that social and location-based social networks were created by and for people who do not care about privacy.

The above findings directly addressed the three research questions I formulated back in Chapter 1 of this study. By answering these questions I was able to provide practitioners with findings that they could utilize to make more informed business decisions regarding the use of location-based social network platforms as business tools. These initial findings also contribute to the current body of literature surrounding the domain of location-based social networks. The high level approach provides a solid grounding for future research to be conducted within this domain.

Table 6 provides practitioners with my initial findings on location-based social networks within New Zealand’s current environment.

Figure 17 provides a decision tool that practitioners and companies can utilize as a foundation for selecting whether location-based social networks are an appropriate tool for their business and which platforms are a potential match for their organisation. This tool should be used in conjunction with Figure 16 as well as the companies pre-existing due diligence into potential location-based social network platforms.


Summary of Initial Findings from Case Studies

Case Studies

RQ1. For what purposes should companies use location-based social networks as business tools?


Customer engagement.

Increasing sales.

Vino Jim Walsh

Real time feedback from customers.

Creation of brand advocates.

Word-of-mouth on a quicker and larger scale.


Companies that have a physical location that is of interest e.g. retail store or companies whom see themselves as a gathering point, will benefit from a location-based social network platform.

Icey Treats John Wilder

Customer engagement.

Sharing of information that is not directly related to the company, but of interest to their users.

Word-of-mouth on a quicker and larger scale.

NZ Mobile Jack Walker

Customer engagement.


To be innovative.

Customer engagement.

Kiwi Air Jay West

The ability to tailor services to a specific target audience. With location-based social networks, companies know exactly who their customers are.

Create and foster high levels of customer-service.

Use as a cross-boundary tool within an organisation.

To gather valuable metrics regarding customers behaviours.



Offer rewards and incentives to your customers to ‘check-in’ to the company’s locations.

Case Studies

RQ2. How can companies use location-based social network platforms effectively?


By engaging in two-way communication with their customers. This means not only actively pushing user generated content to their customers, but also listening to feedback (positive or negative) and taking this feedback on board.

Ensure companies have the time management and investment needed to continually engage with customers.

Vino Jim Walsh

Ensure your location-based social network team has influence within the platforms you plan to utilise. If they do not have any influence, consider hiring an external employee/company that does have influence to represent you on your behalf.

Ensure companies select a user-friendly location-based social network platform.

Do not lose focus on your company’s primary business objective


Understand the costs associated with running a location-based social network service.

Icey Treats John Wilder

As a company if you want to embrace location-based social network platforms, you must be willing to share. This requires that you are not prone to keeping a lot of information private from your customers.


Do not display the standard marketing diatribe on these platforms via one-way communication.

NZ Mobile Jack Walker

Only use location-based social network platforms if your company has a need to. If there is no value from having your company on one of these services, then do not use it.

If utilising “push” services ensures the location-based social network platform, you are using gives customers the ability to opt-in or opt-out of receiving the “push” services.

Kiwi Air Jay West

By utilising location-based social network platforms that are easy for your customers to use.



Before implementing a location-based social network platform, companies should ensure they have the resources and the knowledge required to engage with the platform rather than attempting to retrofit platforms.

Companies should have a set of general guidelines regarding the type of content they post and how/when to moderate customers/end userscomments.

Ensure those team members who will be running the location-based social network platform have personal experience before the implementation of the platform/s.

If companies are utilising “push” services they need to offer/select a platform that gives customers/end users the ability to opt-in or opt-out of such services.


Any company utilising location-based social network tools should ensure that their own terms and conditions (if any) are understandable to the average person.

The commission encourages companies to go over and above what they are obliged to do by law as a matter of best practice.

Piracy Commission Josh Winter

Companies need to be transparent with their customers, especially if they are experimenting with new ways of using location-based social network services.

Case Studies

RQ3. What is the current location-based social network environment in New Zealand?


Low smartphone handset penetration primarily down to costs of ownership + monthly servicing costs (mobile broadband).

Vino Jim Walsh

Users require greater education surrounding privacy. Currently too many users take privacy for granted.

Education in the school environment due to nature of these services reaching those as young as seven and eight years old.

Icey Treats John Wilder

No concerns relating to privacy based on the fact that those who embrace location-based social networks are embracing



sharing which entails not keeping information private.

If users of location-based social networks are worried about privacy issues with the platforms, they should also be worried about banks and handing over their credit cards as a payment method, as location-based social network services are as dangerous in regards to privacy on the above alternatives.


Density issue. Auckland, New Zealand’s largest city only has 1,460,000 million citizens, spread over an area of 6,059km 2 . This limits the amount of value users of location-based social network platforms will experience in comparison to more dense cities like Hong Kong, Singapore and New York.

Smartphone handset penetration rates are very low. This is due to the cost of ownership and only early adopters seeing value in owning a smartphone handset.

NZ Mobile Jack Walker

Cost of cellular coverage in New Zealand is very expensive. Covering all non-metropolitan regions is just not viable for only a few users who want to utilise location-based social network platforms rarely.

Current terms and conditions of location-based social network platforms are not in a language that they average New Zealander can understand.

Much confusion surrounding the billing platforms that NZ Telecommunication providers offer. This leads to users experiencing large bills, which in turn puts off some customers.


Mobile carriers such as 2 Degrees can enable more New Zealanders to adopt smartphones by bringing down the costs of ownership.

Kiwi Air Jay West

Kiwi Air has in place a strict privacy policy within their company that applies to all communication internally and externally with the company.

No environment of customers attempting to ‘cheat’ the check-in system for monetary gain.

Piracy Commission Josh

Three parties involved in using a location-based social network platform: Platform provider, company using the platform



and the end-users/customers.

Issue of platform providershead-offices being offshore raises some issues in terms of jurisdiction and practicalities of how a New Zealand regulator may be able to influence their behaviours.

There are three main groups in New Zealand regarding levels of privacy concern. At one end of the spectrum is the privacy fundamentalists who will do everything they can to protect their privacy. At the other end of the spectrum is the privacy unconcerned group who do not care about their privacy. In the middle, representing the largest grouping of society are those with some privacy concerns. These users however are willing to give up some of their privacy in return for value adding products or services.

Believes greater education needs to be provided to end-users of location-based social network services. However, the issue surrounding whose job it is to provide that education and at what level/s is yet to be decided.

The majority of privacy issues that companies face are not new concepts. Therefore, existing privacy policies may be used with little tweaking to suit the new technological platforms.

Commission sees a fine balance in managing consumers privacy risks. As a regulator, they cannot put all the emphasis on individuals making decisions for themselves. At the same time, they cannot put all the emphasis on the platform providers or companies using the services. Thus, the commission needs to find an effective mixture between the two.



Location-Based Social Network Platform Selection Framework

6 Location-Based Social Network Platform Selection Framework FIGURE 17: LOCATION-BASED SOCIAL NETWORK PLATFORM SELECTION



In summary, the objective of this study was to explore the domain of location-based social networks and provide practitioners with some initial findings that they could utilise to make better informed business decisions regarding the acceptance of a location-based social network platform as a business tool. To achieve this, Chapter 2 reviewed the existing academic literature, which set a baseline expectation for the current location-based social network environment. Chapter 3 proposed a qualitative research methodology consisting of an interpretive case study resulting in a series of interviews with five New Zealand based organisations from a wide range of industry that had experience with location-based social networks. Chapter 4 provided a summary and matrix of the ten largest location-based social network platforms as of November 2010 as well as providing a comprehensive list of all currently available location- based social network platforms. Chapter 5 analysed the case study and its supporting interviews.

Exploration of the location-based social network domain contributes to academic research on a number of fronts. Due to the nature of this domain being so new, literature is still very scarce with the first academic articles appearing mid-year 2010. This study adds this growing body of literature on location-based social networks and sets a solid grounding for future research to explore the specifics within this.

In particular, this study contributes to research by exploring the domain of location-based social networks through the lenses of usage, best practice and current environment within New Zealand. The five case studies provided invaluable insights from three companies that are currently using location-based social networks, as well as insights from a crown regulator whom will be looking into this domain more seriously over the coming years. These insights are not only invaluable for academics but also practitioners who will benefit directly these case studies mistakes, issues and successes

These insights helped answer my three research questions of why companies would use location-based social networks, how companies could effectively and efficiently use location-based social networks and how the current environment of location-based social networks is shaped in New Zealand as of November 2010. I identified the core reason why companies would use location-based social network platforms is one of customer engagement with new and existing customers. Two core themes were identified that would enable companies to utilize location-based social network platforms in an effective and efficient manner. These themes were to ensure your company actually has the resources to run a location-based social network in the first place and to ensure your company does not engage in one-way communication practices. Lastly the current location-based social network environment in New Zealand as of November


2010 is shaped by three key concepts. These are that ease of use of a location-based social network is paramount, mobile handset penetration rates and pricing need to be sorted before location-based social network acceptance rates will increase and lastly end-use privacy concerns must be addressed.

Companies can use these insights to learn why they should or should not be integrating these tools into their organizations, and also to identify current best practices to ensure the efficient and effective use of such tools. New Zealand-based companies in particular can gather helpful information regarding the current location-based social network environment within New Zealand, as too can international companies who work in environments similar in size and scope to New Zealand. This study contributes to academic and practitioner knowledge by introducing the domain of location-based social networks as a tool companies can implement to engage with and extract value from their current customers, while at the same time attracting new customers and growing their companies.

This study also has limitation. Location-based service and social network literature have covered a wide range of sub-domain topics. Due to the relative newness of location-based social networks as a domain, it was only appropriate to take a high level exploratory approach in an attempt to cover as much ground as possible to allow for future research within this domain. Due to the limited time available for this study, only a small number of interviews could be conducted, and to a limited depth. Furthermore, these interviews were reliant on the individual perceptions of the interviewees operating within a New Zealand- based organisations that were currently utilising the location-based social network platforms Foursquare and Twitter. These perceptions may have been biased towards the usersown individual personal use of the platforms, or by their use within their company environment. There may have also been bias towards Foursquare and Twitter and thus not a fair representation of the other location-based social network platforms currently available. The interviewees may have been limited by recall bias when attempting to justify their responses. Even though the findings from this study originated from five organisations across a wide range of organisation sizes and industry, they are still limited based on the newness and slow uptake of location-based social networks within New Zealand. Therefore, results do not necessarily apply to environments outside of New Zealand, nor do they necessarily apply to industries within New Zealand. The decision tool this study provided uses information reflecting location-based social network platforms features and characteristics as at November 2010. Companies must understand the domain of location- based social networks is very dynamic as features and characteristics of a platform can change overnight. Therefore, companies should use the decision tool carefully and ensure they conduct their own due care and due diligence before proceeding with any selections.


The limitations of this study create various avenues for future research. Further research into the individual topics relating to company usage, best practice of location-based social networks as well as the general environment surrounding these tools is required to gain a deeper understanding of why and how companies should use these tools. Future research must also consider the environmental factors within an organisation and how these affect the company’s use of location-based social networks. Future research may attempt to triangulate the findings from the interviews in this study through a quantitative survey of companies once these tools see greater adoption rates. Alternatively, future research could continue to use a qualitative approach and explore a greater number of cases or explore a wider variety of topics inside a single case. These analyses would generate rich insight into the environment surrounding location-based social networks within a wide range of industry and company sizes. Lastly, future research may be conducted to explore the technologies behind location-based social networks, the reasons why consumers utilise location-based social networks or explore the environment from a location-based social network platform provider’s perspective.

This study has attempted to provide a preliminary, exploratory overview of why companies could utilise location-based social networks as a business tool, how these companies can utilise them efficiently and effectively (best practices) and to provide New Zealand-based companies with an overview of the current environment surrounding location-based social networks. Practitioners should take heed of the findings in this dissertation and compare them their own findings in the domain of location-based social networks when investigating the acceptance of location-based social networks as a business tool.

In conclusion, companies must take care when adopting location-based social networks as business tools. Companies should ensure their product or service is one which will benefit from two-way customer engagement, that sufficient resources have been allocated for efficient and effective running of location- based social networks and that companies conduct sufficient due care and due diligence regarding the current environment of location-based social networks before proceeding with any implementation decisions.


Name of Journal

No. of Articles Referenced

Business Horizons


Communication and Strategies


Communications of the ACM


Communications of the Association for Information Systems


Decision Support Systems


Department of Geography Bulletin


Educational Technology and Society


IEEE Internet Computing


Information and Management


Information Systems Frontiers


Information Systems Journal


Information Systems Research


International Journal of Mobile Communications


Journal of Advertising Research


Journal of Computer-Mediated Communications


Journal of Consumer Research


Journal of Information Technology Theory and Application


Journal of Interactive Advertisings


Journal of Interactive Marketing


Journal of Location Based Services


Journal of Science Education and Technology




Management Science


Marketing Communication


Marketing Letters


MIS Quarterly


National Academy of Sciences


Organisational Science


Pers Ubiquit Comput


Society for Modeling and Simulation International


Strategy + Business


Teach Librian


Wireless Personal Communications




No. of Books Referenced


No. of Conference Proceedings/Papers Referenced


No. of Websites Referenced


No. of Reports Referenced


No. of Thesis Referenced


No. of Newspaper Articles Referenced


No. of Unpublished Works Referenced


No. of Figures/Charts Referenced




Appendix B: Ethics Approval

Appendix B: Ethics Approval 87


1. What social media services are you currently using?

2. When did you adopt/implement each of these services?

3. What was your motivation for adopting/implementing said services?

4. How do you perceive ease of use of these services?

5. What are your perceived benefits from using these services?

6. How do you view the issue of privacy in regards to these social media services?

7. Do you have any other concerns or issues with using these types of services?

8. When did you adopt/implement Foursquare?

9. What was your motivation to adopt/implement Foursquare?

10. How do you perceive Foursquares ease of use?

11. What are your perceived benefits from using Foursquare?

12. What are your general thoughts about Foursquare?

13. Do you plan to continue using Foursquare after your current campaign?

14. Would you consider adopting/implementing multiple location based social media services? If so

why/why not

15. Do you view privacy regarding the use of Location Based Social Media services such as Foursquare

differently compared to other Social Media Services?

16. Do you have any specific concerns or issues with Foursquare as a service or Location Based Social

Media as a technology?


Location-Based Social Network Platform

Website Address

Location-Based Social Network Platform

Website Address

Aka-Aki Location Based Social Network

Microsoft Vine Location Based Emergency Social Network

Bliin Location Based Social Network

mizoon Location Based Social Network

Blumapia Mobile Social Mapping for Boaters

Blummi Location Based Social Network

Brightkite Location Based Social Network



Buddy Cloud Location Based Social Network

Buddymob Ultimate social tool

NAV2US A GeoCommunity for friends on the move!

Centrl Location Based Social Network

ComeTogethr- Location Based Social Networking

Wizzper by Ovalpath Corporate Location Based Social Network


EagleTweet Location Based

Social Network app for Tweeter


Network based in Germany


Rally Up Location Based

Social Network


Flaik- Location Based Social Network

FourSquare Location Based Social Network

Foyaje Location Based Social Network app for iPhone


Friends Around Location Based Social Network


Friends on Fire Location Based Social Network app for Facebook




Stalqer Location Based Social Network

Gowalla Location Based Social Network

Tonchidot Social Augmented Reality Mobile Location-based Service

Toodalu Location Based Social Network

closeby Location Based Social Network

Tooio Location Based Social Network

Trapster- Location Based

Social Networking


Social Network framework