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The battle for SXSW is Highlight's to lose

Highlight could join Twitter, Foursquare, and GroupMe as another big winner of South by Southwest.

Highlight is poised to be this year's breakout app at SXSW Screenshot by Ben Parr/CNET

Highlight, a passive location-sharing app, is poised to emerge as the big winner of South by Southwest, thanks to a wave of positive media attention. But will it be able to live up to expectations?

The SXSW music, film, and interactive-media festival is one of the most important and prominent launching pads for tech startups. The confab hosts one of the largest concentrations of techies and early adopters in the world (more than 20,000 will attend this year's festival), making it fertile ground for an app to quickly gain traction and go viral.

Don't underestimate the "SXSW effect" for a startup. Twitter made its big debut at SXSW in 2009, and now it's a multibillion-dollar operation. Foursquare launched at SXSW in 2010, and the company has since grown to more than 100 employees and a $600+ million dollar valuation. Group texting apps GroupMe and Beluga shared the spotlight at SXSW in 2011, and both were quickly acquired by Skype and Facebook, respectively.

Some in the media firmly believe that the next trend to break out at SXSW is passive location-sharing, epitomized by Highlight, which made its debut just a few weeks ago. Highlight, for those of you who haven't tried it, lets you know who you're nearby. It notifies you when you're near one of your friends, but it also shows you interesting people that share common interests. It doubles as a passive business card too, since you can message somebody you find via Highlight at a later time.

Highlight didn't invent passive location-sharing, of course--products such as Loopt and Google Latitude have already tried and failed at it. However, the products may have simply been ahead of their time, especially since Apple gave iOS developers the ability to share GPS location data in the background only last year.

Automatic location-sharing isn't likely to go mainstream anytime soon (there are legitimate privacy issues), but early adopters are far less risk-averse than the general public. I've seen a massive influx of my tech industry friends join Highlight and start sharing their locations, and I've already found several interesting people that I just had to message. This thing already has legs.

The stars have aligned for Highlight. If the location-sharing app doesn't experience a catastrophic failure from the traffic at SXSW, it will emerge as this year's victor. That momentum could turn it into the next must-have app.