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Loopt helps reduce cost of location services

The friend-tracking software developer has struck a new licensing deal with a Qualcomm subsidiary that should make it cheaper for wireless operators to offer location services.

Loopt, the friend tracking software developer, has struck a licensing deal with a Qualcomm subsidiary to help lower the cost of providing location services.

The company will announce Thursday that it has signed an agreement with SnapTrack, a wholly owned subsidiary of Qualcomm, to use QPoint location-based server software to provide social mapping and other advanced location services.

Loopt logo on pumpkin

Location-based services are expected to generate a lot of money for carriers in the future. Already, most major mobile operators are offering some kind of location-based service, such as GPS-enabled navigation or tracking. But the service hasn't taken off in any big way yet.

One of the main barriers has been the fact that the licensing fees on the GPS location information captured by the phone via the SnapTrack technology is very high. Today, carriers must pay at least a few pennies every time a location query is made. This may sound low, but it adds up. And it's a cost that is difficult to make up considering that most targeted location-based advertising generates less cash per query than the licensing fee, said Sam Altman, co-founder and CEO of Loopt.

"The cost structure for location based services has been out whack," he said. "That's one of the reasons that these services and location-based advertising haven't take off yet."

Under the new arrangement, Loopt will pay a flat fee per month per user, which provides unlimited location queries. This means than instead of paying a few cents for every query, the cost of discovering a location can be scaled back to tenths or hundredths of a cent depending on how many location queries a customer makes in a month.

This makes implementing location-based services much more affordable for carriers, who would like to generate revenue on these services through targeted advertising.

Loopt also plans to provide its location-based technology to other software developers, so that they can develop location-aware applications. The new licensing arrangement with Qualcomm will also allow these software developers to benefit from the Loopt-SnapTrack licensing deal.

Loopt already offers its friend-finding and alerts service to Verizon Wireless, Sprint, and Alltel. It also offers its application through Apple's iPhone App Store.