As Whrrl launched the third version of their iPhone app yesterday, how exactly should we view it?  Is it simply another service in the rapidly crowding Location Based Service (LBS) marketplace or does it offer enough unique services that it is significantly differentiated?  While Whrrl does have some unique features to distinguish it from the likes of Foursquare and Gowalla, is it enough to slow the momentum of these dominant services?

One of Whrrl’s differentiating features is what it calls “Societies”.  A society is a group of users either based on real world friends or — more interestingly — based on a Netflix-like recommendation system.  These societies help to recommend locations that the user should visit based on the past locations.  “Do you like this pizza place? Well, based on other users that like that pizza place you might like this other restaurant as well…”  This fascinating feature is another small step in the gradual Netflix-ization of our world.  No longer is it just our products on Amazon, our friends on Facebook, or our romantic interests on eHarmony: now real world locations are ready to be suggested.  The value of this service is not hard to imagine: who doesn’t want to be suggested a place that you will like more than you can know?

Whrrl is attempting to brand itself as the means to get you out of your “Social Rut”, and is thusly touting itself as a more social application than the other LB services. While they currently might be the most innovative, does it matter?  In an industry where the only real capital is having a critical mass of users, will Whrrl be able to survive?  It is still too early to know for sure, but I highly doubt it.  Foursquare and Gowalla presently have the big guns not only in funding, but also in their massively growing base.  Whrrl’s fantastic idea of location based recommendations will surely soon be adopted by the other services, potentially stifling the uniqueness of Whrrl.  With that said, Foursquare and Gowalla must still be nervous with the impending threat of Facebook and Yelp entering the LBS marketplace.  The question then is how will they differentiate themselves against the biggest guns?