Fire Eagle out of Beta - so will it fly ?

We've been watching Fire Eagle over the months, and now its out of Beta it will be interesting to see if it gets a large takeup. We're not that convinced that the mass market for location based services is here yet. Reading MG Siegler in Venturebeat:

I’ll say it again: Location, location, location. As computing continues to go mobile it’s an increasingly important feature for many web services.

And we'll say it again - Economics, Privacy, Usability - "Location Based Services" have been pimped as the Next Big New Thing for at least 10 years, but so far have always undershot the hype. To be fair, Yahoo is well aware of these issues, as Brickhouse head of product Tom Coates noted:

As with all location-based services, the question of privacy is an important one. Yahoo Brickhouse head of product Tom Coates made it very clear that users are in complete control of what location information is made available. There is a “Hide Me” button that allows you to go-off-the-grid as it were if you are “having an illicit affair,” Coates joked.

Interestingly, you can also lie about your location. This is similar to functionality other services have such as Loopt, a location-based mobile social network.

The fact that many of the audience questions after the presentation also revolved around privacy shows just how important it is. Coates made it clear that all location information given to the third party partners was opt-in only. The service also sends out email reminders that you having your location data set to be shared. If you don’t respond to this email that you wish to keep sharing it, Fire Eagle will turn it off.

That privacy thing is non trivial - a lot of consumer tests show that most people (outside the geek road warriors community) do not want others to know where they are all the time, and they don't even want the expectation that it is possible.

The other issue with Location Based Services is Economics Based Supply - all the 'Web based services are freebie giveaways at the moment, using Angel/VC money. (You love Dopplr - I love Dopplr - so what would you pay for it.... ). There is no viable business model yet apart from generating "coolth" and Ad revenue for big blogs (we expect to see Freemium models emerge, but it will be awhile).

Mobile based services have struggled as the transaction costs are high, and those on mobile seldom pay enough for the services to be viable, apart from those with high points of need such as maps and navigation, or very motivated communities such as dating and gaming (which is why nearly all are still operator based services). Localised Ads have still to bloom after 10 years of marketeering them, user tests on the small-screen mobile real estate have consistently shown them to be a pain in the *rse to use.

And today, if you want to know of a great restaurant in SoHo, or where your friends are, you just use Twitter or somesuch anyway. Pull beats push for most users

So - will Fire Eagle tip this balance? It will certainly make it easier for upstream developers to add location based data, and for downstream ones to integrate it - and that may raise the game to a level where services become useful enough to overcome the current economic drawbacks. Overall, this is a good building block, but more needs to be done overall to bring TOC in this value chain down.

Our take - Location Based Services will indeed be the Next Big Thing - maybe Next Year even