Foursquare, the location-based mobile game startup that pioneered the checkin, will introduce version 3.0 Tuesday evening. The new release turns on the power of every checkin accumulated over the course of its two-year history and transforms that data into recommendations.

"Our theme internally has always been that every checkin counts," says co-founder and CEO Dennis Crowley, who speaks of version 3.0 as the materialization of that philosophy.

New Recommendation Engine

The Foursquare user will immediately begin to see the value of the checkin in the new Explore tab. The Explore tab, which sits where the Tips tab once was, now serves as the meat of the application. Here, users can query for recommendations or dive into food, coffee, nightlife, shops and arts and entertainment recommendations served up by Foursquare and ranked by what's most interesting to the user.

Crowley explains that recommendations are similar to Amazon or Netflix recommendations, but made for the real world. He compares the recommendation engine to a recycling center that makes old data new again. "We're recycling data; so [the engine] spits back things that are tailored to what you're doing."







The engine is constantly being refined, and Crowley is wisely reluctant to share its secret sauce. He does indicate that the engine takes into consideration many factors including places you've checked in, frequency of checkins, places friends go, places friends go that you haven't been to, places you've been with friends, time of day and day of the week.

Version 3.0 also reemphasizes points, which have faded over time. Points have been resurfaced and fancied up in the Me tab because the startup has introduced a new points system that aims to better encourage user behavior. There's now 30 different triggers for points, says Crowley, and the leaderboard is more focused on friends.

The startup has historically structured its applications around three principles: discovery, encouragement and loyalty. Recommendations introduce much improved discovery mechanisms; the new points system works on the encouragement piece; and a slew of new special types being rolled out Wednesday will help in the loyalty department.







New Merchant Features

There will soon be seven special types available to merchants: Check-in Specials, Friend Specials, Flash Specials (e.g. the first 10 people to show up after 5 p.m. get a free drink), Swarm Specials, Newbie Specials, Mayor Specials and Loyalty Specials. Foursquare will reveal more details in the days ahead, but the startup is introducing these new special types to respond to merchant demand.

Version 3.0 supports the new special types and also finally allows application users to browse all nearby specials in the Places tab.

Foursquare, which owes much of its early success to adoption by SXSW Interactive crowds in 2009 and 2010, is releasing version 3.0 in advance of the festival to get people talking once again.

"South by Southwest is a good opportunity for us to try to get people to think differently about what we're doing," says Crowley. He speaks of his company being misinterpreted as just a checkin game, and of SXSW as a platform to change this perception.

"We help build tools that make it easier to explore the world," he says. "We have a chance here to invent the future … and play in the sandbox that we created."

American Express Partnership

In this sandbox, Foursquare has crafted a new castle of sorts: a pilot program with American Express that offers cardholders automatic savings when they swipe their cards at 60 participating merchants in the Austin, Texas area.

The new automatic credit card swipe AmEx specials are supported in version 3.0. The main idea, says Crowley, is to remove friction from redeeming merchant rewards. Foursquare users need only register their American Express cards and tap to unlock the special in the app. The "spend $5, save $5" credit is then automatically applied to the cardholder's account when the credit card is swiped by the merchant.

The program will be officially unveiled Thursday when Austin merchants offering these AmEx specials will be revealed. Early details leaked last week from the Wall Street Journal, but Crowley says much more news is still to come.

The AmEx partnership is nothing more than an avant garde credit card specials experiment and will only run from March 11 through March 15. It could, however, have larger implications on all Foursquare specials in the future. And, if Crowley gets his way, forever change how people think of Foursquare.