08/31/2010 03:24 pm ET Updated May 25, 2011

Check-ins vs. Persistent Location: How Big a Deal Is Facebook Places?

On August 18th, Facebook launched their long-anticipated Places -- both a response to Foursquare and Gowalla and an articulation of Facebook's mobile strategy. The idea is straightforward: for Facebook to command more time from their 500 million users, they need to extend the online user-experience to the offline. With Places, those who use Facebook to keep up with friends can now use Facebook to meet up with friends.

Even before meaningful Places data becomes available, we know from Foursquare that the future of mobile social networking is closely tied to users broadcasting their current location through 'check-ins.'

But how important is the check-in to other verticals? Facebook has long sought to extend its social graph to other websites through its Facebook Graph API. A Facebook user goes to the Huffington Post website and instead of registering from scratch, she puts in her Facebook username and password and is authenticated. With Places, websites can be notified in real-time through the Facebook Graph API of a user's location each time the user checks in to Facebook.

Will Facebook own location with its Places check-in service? Doubtful. In the time since the first check-in services were launched and the recent launch of Places, there's a new more compelling location opportunity for most verticals that will make check-ins old hat. Persistent location is now made possible using Apple's iOS 4.0 and the Android operating system which allow location to be extracted from the handset on a periodic and continuous basis.

Consider the Holy Grail example for the use of location that entrepreneurs have been describing for years. Someone walks by a Starbucks and a message appears on her phone: "Come on in to the Starbucks (you're a few blocks away and here is a map to get there) and receive 50% off a Frappuccino." This example would never work with Places and the Facebook Graph API or any of the other check-in services. With the check-in, Starbucks will only have the ability to message you based on when you tell the service exactly where you are. But what's the likelihood as you're walking by Starbucks you decide to check-in to Facebook? For Starbucks or any other business to predictably message you when you're nearby, they're going to require access to your location on a persistent and continuous basis. It's persistent location, not check-ins, that will realize the potential of location-based services.

To be sure, persistent location has its own challenges associated with users permissioning anonymous access to their location data. This will only happen when the user believes the value derived from the service outweighs any perceived privacy risks from sharing his location. For persistent location to work in the example above, I have to be motivated by cheap lattes. I'll permission J Crew to know my location, but won't be particularly excited if Kmart is sending me a message each time I walk by one of their stores.

How much do I believe that persistent location is the future? I've bet the past three years of my professional life on persistent location. I'm the Chairman of Xtify -- the geo-notification ASP and MeetMoi -- the location based dating service.

On August 5th, the Daily Candy launched the first true location based service using persistent location on Android devices. Powered by Xtify, the Daily Candy quite literally sends me a message when I'm nearby a promotion from a boutique-clothing store. MeetMoi is using persistent location in a manner that will revolutionize the online dating industry. If you install MeetMoi on your Android device (and shortly on iPhone 4.0 phones), the service will continuously look for matches that meet your dating requirements and that are within one mile of you. Think of the transformation in dating services as they go from a browse / search based model (i.e., to an always on location based model with intelligence in the cloud doing the work for you and finding dates that are proximate in time and space.

Today, MeetMoi announced that it has become the first mobile dating service to integrate with Places. How big a deal is this? For users that don't download our Android and iPhone apps, it's a quantum leap from the current state of mobile dating. But it's nowhere near as compelling as the use case with persistent location I describe above. So why do it? With Facebook being Facebook, the press might jump all over the 'first' announcement in each vertical that integrates Places.

It will be at least a year from now before we know the real winner in the location battle of persistent location vs. check-ins. Places and check-ins will likely win in mobile social networking. But my money has the winner of every other business vertical (including e-commerce, real estate, publishing, and dating) using persistent location data as the determinant factor in making these new services truly location based.