Now because of the rise of social media and smartphones, companies like LivingSocial and Foursquare can target consumers and drive them to storefronts in ways that the Yellow Pages and websites from the past boom like Microsoft's (MSFT.O) Sidewalk could not do.
"I think we're in a position to do something revolutionary for local advertising," Foursquare Chief Executive and Co-Founder Dennis Crowley said during the Reuters Global Technology Summit on Thursday.
The pool of dollars is huge: U.S. local advertising spending is expected to reach about $136 billion in 2011, according to Bia/Kelsey.
Foursquare is a mobile application with about 10 million users who "check-in" to area establishments, which are then shared with the user's social network of friends.
About 400,000 merchants use Foursquare tools to drive traffic to their stores.
"I think that we will hit our inflection point the same way that Twitter did," Crowley said. "I can imagine getting to 100 million users. I can imagine us exceeding that."
Foursquare and LivingSocial, the online daily deals site, are part of a new wave of companies that have attracted investors interested in owning a piece of the social media business.
The first social media site to test investor appetite and go public was LinkedIn (LNKD.N), which made its stunning debut on the New York Stock Exchange on Thursday, defying even the highest of expectations by closing 109 percent above its IPO price at $94.25.
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