Social networking holds potential

Enterprise - a sure bet

Although there are some social networking applications that take advantage of location, these apps are in their infancy. Examples include Loopt, which allows users to share their location information, and uLocate, which enables cross-carrier LBS applications. Both are available through multiple carriers and OEMs (and both were FierceWireless Fierce 15 winners in 2008.)

However, the business case for social networking applications that are melded to navigation and LBS is far from clear. Steve Andler, vice president of marketing at Networks In Motion, said the effort requires enormous investments. "Guys who are in the social networking business do not want to spend millions to build navigation engines," he said.

One company that is willing to make the investment is Litscape, which has an application and platform called 3Deep. 3Deep takes advantage of GPS to contexualize a user's location. The application allows users to see whether someone is on the phone, what their availability is like based on their calendar appointments and their location. If users want the application to apply to all of their contacts, they have to pay for a subscription, which is $2.99 per month or $29.99 per year

Litescape CEO Gary Griffiths believes that social networking applications merged with LBS have great potential and will grow this year. However, the key is the business model. "We have an application that would deserve a premium. We're not naïve in that we can build that marketplace on our own," he said. "Without a carrier, our distribution challenge is pretty great. We are mindful of, realistic enough to know that anything we did in that area, we'd be giving that up to the carrier. They deserve a right to monetize their user base."

Frank Dickson, an analyst with In-Stat, said the value of social networks is in the network of users who take advantage of it, and that many application providers may not have enough of a following to catch the eye of a carrier partner. "How are AT&T and Verizon going to see a significant enough revenue flow to make it worthy of them? It's a tough sell for me," he said.

Paid vs. free: which business model prevails?

Enterprise - a sure bet