Report: Microsoft, American Express in talks to acquire foursquare stake

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Microsoft (NASDAQ:MSFT) is competing with American Express and other potential suitors to purchase an equity stake in mobile social network foursquare, Bloomberg reports.

A source with knowledge of the discussions said Microsoft and AmEx are competing to invest in foursquare instead of cooperating on a joint bid. A foursquare stake would enable Microsoft to gain a foothold in social networking and mobile, two segments where the company has struggled. For AmEx, which teamed with foursquare in 2011 to launch a merchant offers program, the deal would afford greater opportunity to connect marketing and loyalty programs to social media activity. Foursquare also is talking with other firms about a possible investment, and the talks may not lead anywhere, another insider said.

"This falls squarely in the 'rumors and speculation' category," a foursquare spokesperson told Reuters via email. Microsoft declined to comment. American Express said it "does not comment on rumors or speculation." 

Originally synonymous with local business check-ins, foursquare has gradually evolved its business to support features like Promoted Updates, which leverages opt-in user location information to spotlight deals from nearby merchants. More than a million retailers and restaurants have added their businesses to foursquare's database. In addition, more than 40,000 third-party applications have integrated the foursquare platform instead of building out their own location databases, enabling the firm to collect data from popular social media apps including Facebook (NASDAQ:FB)-owned Instagram, Twitter's Vine and Path.

Foursquare has raised a total of $112 million, and in April secured $41 million in financing from private equity fund Silver Lake Partners and venture capital firms Andreessen Horowitz, Union Square Ventures, O'Reilly AlphaTech Ventures and Spark Capital. Foursquare generated just $2 million in sales in 2012 but is on track to beat its 2013 sales goals, Chief Revenue Officer Steven Rosenblatt told Bloomberg.

"I think we've proven our business model," Rosenblatt said. "Our business model is very clear and it's working, doing what we thought it would do, if not more. It's all well ahead of what we anticipated." He declined to disclose foursquare's sales targets.

Foursquare CEO Dennis Crowley told AllThingsD the firm is poised to roll out a new feature enabling mobile users to automatically view consumer tips and reviews about the location they're currently visiting without booting up the app itself, instead allowing foursquare to run on background mode. "This is the version of foursquare that we've been talking about building for a long time," Crowley said, adding the new option will arrive on both Android and iOS by the end of this year.

For more:
- read this Bloomberg article
- read this Reuters article
- read this AllThingsD article

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