Microsoft, Amex compete for piece of Foursquare Labs

Microsoft and American Express are vying to take an equity stake in Foursquare Labs, according to people with knowledge of the discussions.

The two companies are competing to invest in Foursquare rather than cooperating on a joint bid, said one person, who asked not to be identified because the information isn’t public. Foursquare is talking with other companies about a possible investment, and the talks may not lead to a deal, said another person with knowledge of the matter.

Foursquare, which lets users check in to show they’re visiting a place like a restaurant or shop, is also negotiating with venture capitalists who own convertible debt about turning their holdings into equity, said one of the people.

The discussions suggest that potential investors are more bullish on Foursquare’s prospects after it began reaping the benefits of a new advertising approach that lets brands target users when they’ve checked into a locale. Foursquare in April raised $41 million in debt, a move that let it keep tinkering with an unproven business model while delaying debate about the company’s true worth.

Bloomberg