From foursquare to GPS to Google Places (news, site), location-based services are taking off in a big way, but are users willing to sacrifice their privacy for better deals, dining out suggestions, keeping track of friends and other 'benefits'?

Your Own Surveillance Society?

For users who have 'grown up' with social media, it is almost second nature to grab the latest quasi-social media app and try its new features. The user might think that it is useful or fun, when friends can see where they are, what they're doing and so on. But, do they (particularly younger users) consider the wider picture when using location-based services (LBS)?

A Microsoft survey conducted around the world suggests users are more cautious than you might think. The report coincides with Data Privacy Day (you had that one marked in the iCal right?) and finds that 51% of respondents have tried LBS.

Of those people, 94% saw some value in using a service (be it simple GPS or foursquare -- users are unsure of an exact definition), which has to be good for their long-term viability. However, 52% were concerned about the loss of privacy and 58% want to restrict who can see their location. Most services already allow this, but how many of these users really investigate that settings panel?

For Business, its Location, Location, Location

While consumers have some reason to be nervous, for businesses, the ability for people to find you is a winning priority. Which is why Google and others give free kits to businesses to get them signed up on such services.

Differentiation has to be the key here for business. As an example, in my local block of shops, there are nine Realtors, four chinese takeaways and three repair garages. Which one would I choose based on an online location service? I've certainly never seen a rush of smartphone wielding customers all rush into one store offering some bargain.

Personal recommendations will go so far, but will it take a convergence of services like Groupon and LBS to nudge potential customers into a business? The service that can offer the best chance for a company to stand out above its rivals should see greater activity and revenue from business users.

Will the Powers That Be Wade In?

The elephant in the room (in many countries) is the lagging legal perspective on LBS. It will only take a location service to be implicated in a murder, kidnapping or other grim affair to bring it to the top of every tabloid agenda.

A do-not-track campaign, similar to the current online version, could be forced on companies restricting their services somewhat, or at least forcing them to put all the security options in a more up-front position.

Whatever your angle, the Microsoft survey has advice for users, business and developers. Despite the massive hype, the convergence of LBS, voucher and deal companies is still a slow growing affair in all but the most bustling metropolises. Perhaps it will be a truly local service with in-depth knowledge that can trump these media darlings.