Five Emerging Internet Companies You Should Know About

Every Internet giant, from Netscape to Google

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[AMZN  Loading...      ()   ] to Facebook, may have seemed to come out of nowhere to become a brand name, but they all tapped emerging consumer and business trends.

AP It's not just about being "social" any more. Now it's about being social and mobile at the same time.

The new breed of Internet stars combine two separate trends—social networking and mobility.

“The platform shift from the nonsocial to the social is opening up a bunch of different opportunities to create new businesses on top of existing categories,” says Andrew Braccia, partner at venture capital firm Accel Partners. “With that shift comes the opportunity for people to build new products and services that take advantage of the unique characteristics of those platforms.”

Braccia notes that social networking and mobility have had a particularly strong impact on online retail, content and gaming.

The five companies featured here haven’t quite reached superstar status but given the attention they’ve received from consumers and venture capital firms alike, they’re on their way.

Foursquare

The biggest buzzword in social networking is "geolocation"—the ability to broadcast where you are and find out where your friends are.

The biggest name thus far is Foursquare, which turns location-sharing into a game that lets users compete for points. When users check into certain venues often enough from their mobile phones, they earn badges. Check in more than anyone else and you can become the “mayor” of a specific location, until someone else checks in more and claims the title.

Augie Ray, senior analyst at Forrester Research, says this type of real-time geographical information is valuable to marketers. Starbucks

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[SBUX  Loading...      ()   ], for example, recently offered mayors of their stores a $1 discount on Frappuccinos.

“The geolocation tools are not merely saying where somebody is, they’re also allowing people to associate themselves with their activities and their favorite brands, so that also becomes very relevant information that marketers can use to target,” says Ray.

Last week the service registered its 2 millionth user—just three months after passing the 1- million user mark. In late June, the company raised $20 million through a later round, preferred stock sale, led by Union Square Ventures.

Similar companies to watch: Booyah, Gowalla.

Groupon

This Chicago-based company leverages the power of social media to offer local deals. Groupon offers a daily deal to customers in 150 cities worldwide, who have signed up to receive its email promotions.

One recent deal: a day-long digital photography class at the Chicago Photography Academy for $45, compared to the regular price of $125.

Groupon says it works on “collective buying power.” Basically, it promises local merchants a minimum number of customers, allowing it to offer discounts. Groupon takes 50 percent of every deal, plus a credit-card processing fee. Since launching in November 2008, the company has sold more than 7 million deals. On Wednesday, Twitter announced that it is working with Groupon on offers for its new “@earlybird” feed.

“The local merchant wins because they’re able to get exposure in a very cost-effective way,” Braccia says. “The consumer obviously wins with a great deal. And Groupon wins as the intermediary. There are very few businesses where everyone wins like that.”

Last December the company raised $30 million through a preferred stock deal. In April, the company nabbed $135 million in a financing round, led by Russian holding firm Digital Sky Technologies, to fuel its global expansion. The company expects to serve 300 markets by the end of the year.

Similar companies to watch: HomeRun, LivingSocial.