In a blog post, Foursquare says the partnership – which includes a multi-year contract for Microsoft to license Foursquare data – means places that appear across Microsoft’s services will be enhanced with contextually-aware experiences and “the best recommendations of any service in the world”.
Foursquare says the funding and integration within Microsoft’s products also means more people around the world will get access to its service. It currently has 45 million users.
Microsoft will be hoping the deal will help it keep up with competition from the likes of Google and Apple by enhancing its maps and contextual location-based search results.
It is not the first time Microsoft has invested in a social service. In 2007, it bought a stake in Facebook that at the time valued the company at $15bn.
Foursquare is estimated to have generated between $15m and $20m in revenue this year, up from about $2m in 2012, according to Wall Street Journal sources. The spike was driven by Foursquare opening up its beta advertising programme to all businesses via a self-service platform last October. The data licensing partnership with Microsoft is also set to fuel further revenue growth in 2014.
The Foursquare investment was announced on the same day Microsoft confirmed it had appointed company veteran Satya Nadella as its new CEO, replacing its outgoing leader Steve Ballmer.