Will Facebook Nearby Hurt Yelp or Foursquare?

Yesterday, Facebook announced an expansion of its mobile local search functionality in Nearby. With Facebook being the #1 social network online, is this a bad sign for other SoLoMo (Social Local Mobile) players like Yelp and Foursquare?

Until now, Facebook’s location based features were pretty limited. Businesses normally had their Place or Brand Page (or eventually merged Places), but users were limited to really just “likes” or check-ins with that business. There were no ratings or recommendations, although users could post one on the business’s Timeline. The previous Nearby function was limited to see which friends had checked-in near you.

Facebook recently began testing ratings for local business, but only if they had checked into them previously. With over 250 million Facebook users checking-in or tagging posts with their location, it was only a matter of time before Facebook updated its offering.

The New Facebook Nearby

The new version of Facebook Nearby was brought to you by the former team of Gowalla, which Facebook had previously bought (speaking of talent acquisition, what Facebook does with Instagram still remains to be seen). TechCrunch has a great hands-on of the new features, but it basically it includes:

• Find New Places: when you open up the app, you won’t see just where your friends have checked-in. Now you’ll see categories of business and a highlight of places around you. These recommendations are curated from data including your friends’ likes, check-ins, short recommendations or star ratings.
• Share Places with Friends: You can also share your ratings or recommendations with your friends, which makes their app experience more personalized.

While features are limited for now, Facebook has hinted at more to come in the future.

What About Yelp and Foursquare?

If you look at the number of users and time spent wasting away on these platforms, Yelp and Foursquare should be concerned with this news. People tend to trust the opinions of their friends and if those people are on Facebook too, then that’s where they will get their local recommendations.

Foursquare and Yelp still have some things going for them though. Facebook Nearby does not have the ability to show you which friends are near you at the moment you’re using the app, or the ability to offer check-in deals which Foursquare does. However, most users paired Foursquare with Facebook and it’s total user base is only about 25 million users.

Yelp should be concerned as well, but it’s consistently been the top source for the most rich, detailed local reviews and ratings. Both mobile and desktop users continue to grow and it’s been one of the standouts in tech-IPOs. Yelp is more likely to withstand this move from Facebook than Foursquare is.

Have you had a chance to use the new Facebook Nearby? Will it pull you away from Yelp or Foursquare?