One of the biggest questions in social media is if you open up as a free service, and you build good will with your users, how do you finally monetize your site so it actually becomes a money making proposition? This was a question that plagued Twitter for years, leading many, myself included, to joke that their plans for being profitable were built around the idea of getting an endless stream of capital investment. As we all know they are moving towards other methods of generating revenue, but what are other types of sites such as location based services supposed to do?
Gowalla has become well-known as being the location based service that rewards you with “passport stamps” for each place you go, and if it is a well-known location you get a fancier stamp called a featured stamp. Up until now those stamps have been for locations such as historical sites, NFL stadiums, distinctive airports and so on, but now it appears that businesses in 30 different cities can arrange to have a custom stamp made for their location as well as being featured in the city for a day of their choice they paid for.
If you go to Gowalla.com/calendars you can see what days are available for your city. Each month starts off as low as $5 for the day and increases by $5 per day through the end of the month. Not only will you get the custom stamp, but you’ll be featured for the city on that day and receive a window cling for your business.
It’s an intriguing idea, and for the Jan. 2011, the month the system defaults to, Austin, TX is nearly sold out while New York City is cheaper and still has a lot of open days. While I can understand Austin doing so well since that is where Gowalla is based, New York City does start at $5, and you would think that would be a bargain for any business in such a highly competitive environment.
If it will be a success is anyone’s guess, but I think it has some definite potential.