The recent emergence of location-based mobile social networking services offered by providers such as GyPSii, Pelago and Loopt is revolutionizing social networking by allowing users to share real-life experiences via geo-tagged user-generated multimedia content, exchange recommendations about places, identify nearby friends and set up ad hoc face to face meetings. 

“Location-based mobile social networking revenues will reach $3.3 billion by 2013, but successful business models may differ from what many observers expect,” says ABI Research principal analyst Dominique Bonte. “While location-based advertising integrated with sophisticated algorithms holds a lot of promise, the current reality rather points to licensing and revenue-sharing models as the way forward for social networking start-ups to grow their customer base and reach profitability. Recent evidence: the agreements between GyPSii and both Garmin and Samsung. Similarly, Loopt has established partnerships with all major US cellular carriers.”

New positioning technologies such as Skyhook Wireless’s hybrid solution combining GPS, Wi-Fi- and Cell-ID for improved indoor coverage have been licensed to several social networking vendors. Many social sites are powered by open location-based platforms such as uLocate’s Where. However, several factors are hindering mass market adoption of location-based mobile social networking. Privacy concerns are still a major issue. Many small players are struggling to create sufficient brand awareness in a fragmented market. And the traditional concerns about the cost of data plans also cast their shadow over social networking.

Location-based mobile social networking constitutes a framework within which previously independently-launched location-based services such as search, friend-finder, people tracking and user-generated content find new momentum by complementing and reinforcing each other. Hence, it comes as no surprise that Nokia is moving in quickly with the acquisition of Plazes and the beta launch of the location-enabled Nokia Chat social instant messaging application.