Loopt, which has more than 1 million users, has tapped a new source of sales by running ads on the service, said Chief Executive Officer Sam Altman. The company currently makes most of its money selling its technology to wireless carriers and acting as a platform for other software developers.
Loopts technology allows users to voluntarily show their location on a digital map, letting friends and family know where they are. Google entered the market in February, offering a location-tracking service called Latitude. The publicity from its new rival is helping fuel growth for Loopt, which should be profitable by year-end, Altman said.
“Its actually been really great for us,” Altman said last week in an interview. “Our growth has accelerated since they launched.”
Even so, Google could emerge as a bigger threat, said Charles Golvin, an analyst with Forrester Research Inc. in Cambridge, Mass. People that already use Gmail and other Google services can easily add Latitude, instead of having to find Loopt and add it separately, he said.
“Their focus is fairly narrow,” Golvin said. “Location is just one attribute of a wide variety of services.”
Dunkin Donuts
Loopt runs an opt-in service, meaning users have to agree to be tracked. Its ad business relies on a customers location information to provide relevant on-screen commercials. Dunkin Donuts, for example, shows ads when Loopt users are near its restaurants. Ad revenue could make up as much as 70 percent of total sales by the end of the year, Altman said. He declined to give specifics.
The Mountain View, California-based company plans to expand outside the U.S., possibly this autumn, Altman said. Loopt also may forge a partnership with Google to let it sell more advertisements, he said.
“We have some concerns about where they fit on this friend-and-foe continuum,” Altman said. “I dont know if well end up doing a deal or not, but its certainly something were considering.”
Google, which is also based in Mountain View, didnt respond to a message seeking comment.
Google rose $6.84, or 1.8 percent, to $396.84 today in Nasdaq Stock Market trading. The shares have climbed 29 percent this year.