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Chapter 10 E-commerce: Digital Markets, Digital Goods 433

available on smartphones. A geosocial service can tell you where your friends
are meeting. Geoadvertising services can tell you where to find the nearest
Italian restaurant, and geoinformation services can tell you the price of a
house you are looking at, or about special exhibits at a museum you are passing.
Wikitude.me is an example of a geoinformation service. Wikitude.me
provides a special kind of browser for smartphones equipped with a built-in
GPS and compass that can identify your precise location and where the phone
is pointed. Using information from over 800,000 points of interest available on
Wikipedia, plus thousands of other local sites, the browser overlays informa-
tion about points of interest you are viewing, and displays that information
on your smartphone screen, superimposed on a map or photograph that you
just snapped. For example, users can point their smartphone cameras towards
mountains from a tour bus and see the names and heights of the mountains
displayed on the screen. Wikitude.me also allows users to geo-tag the world
around them, and then submit the tags to Wikitude in order to share content
with other users.
Foursquare, Gowalla (now owned by Facebook), Loopt, and new offerings
by Facebook and Google are examples of geosocial services. Geosocial services
help you find friends, or be found by your friends, by “checking in” to the
service, announcing your presence in a restaurant or other place. Your friends
are instantly notified. About 20 percent of smartphone owners use geosocial
services. The popularity of specialized sites like Foursquare has waned as
Facebook and Google+ have moved into geosocial services and turned them
into extensions of their larger social networks.
Loopt has 5 million users in 2012. The service doesn’t sell information to
advertisers, but does post ads based on user location. Loopt’s target is to deal
with advertisers at the walking level (within 200 to 250 meters). Foursquare
provides a similar location-based social networking service to 22 million reg-
istered users, who may connect with friends and update their location. Points
are awarded for checking in at designated venues. Users choose to have their
check-ins posted on their accounts on Twitter, Facebook, or both. Users also earn
badges by checking in at locations with certain tags, for check-in frequency, or
for the time of check-in. More than 500,000 local merchants worldwide use the
merchant platform for marketing.
Connecting people to local merchants in the form of geoadvertising is the
economic foundation for mobile commerce. Mobile advertising in 2012 will
reach $2.6 billion in 2012. Geoadvertising sends ads to users based on their
GPS locations. Smartphones report their locations back to Google and Apple.
Merchants buy access to these consumers when they come within range of a
merchant. For instance, Kiehl Stores, a cosmetics retailer, sent special offers
and announcements to customers who came within 100 yards of their store
(eMarketer, 2012).

OTHER MOBILE COMMERCE SERVICES

Banks and credit card companies are rolling out services that let customers
manage their accounts from their mobile devices. JPMorgan Chase and Bank
of America customers can use their cell phones to check account balances,
transfer funds, and pay bills. An estimated 134 million people bank online at
least once a month.
Although the mobile advertising market is currently small ($2.6 billion), it
is rapidly growing (up 44 percent from last year and expected to grow to over
$12 billion by 2016), as more and more companies seek ways to exploit new

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