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Rival parties square off at SXSWi

It was a big game of showmanship as Foursquare and Gowalla threw their rival parties at the annual Austin, Texas festival on the same night.

At Gowalla's party on Monday night, the disco lights were blinding. Caroline McCarthy/CNET

AUSTIN, Texas--Disco lights. Bubble machines. Big-name DJs. Ashton Kutcher.

Those are just a smattering of the things you would have seen on Monday night in downtown Austin, Texas, where two of the most talked-about parties of the South by Southwest Interactive Festival (SXSWi) were happening simultaneously. These would be, of course, the respective parties thrown by Foursquare and Gowalla, two start-ups offering very similar "geolocation" services. And at SXSWi, where everyone wants to know where everyone else is in instant real-time, this kind of social-networking app is going to be big.

Most people expected that SXSWi would see a face-off between the two rivals--Foursquare's loyal New York media following would be rolling into town for the occasion, but Austin is Gowalla's home turf--and nowhere was that more evident than on Monday night. The two companies were throwing parties right down the block from one another at the same time. Digital agency Jess3 even designed cheeky "Geolocal Showdown" posters as though the whole thing were a massive boxing match.

There were no strippers or fire-eaters, but there were plenty of flashing lights and loud music. Guests to Foursquare's party, thrown in conjunction with a smattering of start-ups like Brizzly and Stickybits, were greeted with a machine spewing bubbles and tables offering more free T-shirts, stickers, and temporary tattoos than they could possibly dream of. Gowalla was giving away swag, too, and the tropics-themed party featured a DJ set by electronic artist Diplo and more free mai tais than you could shake a tiki torch at. It goes without saying that the lines to get into both parties were quite long.

Gowalla had the charity advantage, thanks to a partnership with the Lance Armstrong-founded Livestrong Foundation. Foursquare had the celebrity edge, attracting the likes of Twitter CEO Evan Williams and actor Ashton Kutcher, whose job title these days could be best described as the Hollywood ambassador to Silicon Valley.

But as though the powers-that-be were trying to send a message about over-the-top start-up hype, it started to rain that night. Both the Cedar Street Courtyard and the Belmont are indoor-outdoor venues, which meant that it wasn't just the people waiting in line who were getting soaked. That didn't stop everyone. Many guests accepted the risk that their treasured iPhones might be exposed to unfriendly elements, and stayed outside anyway.