Since I moved to Austin in October, Foursquare’s game of location-based tag has held my interest, allowing me to familiarize myself with the town a bit better and connect quicker with people in the tech scene. I hadn’t yet experienced the a-ha with it though. So when I heard of Austin-based competitor Gowalla, I was willing to give it a shot. Even more so when news hit of its $8.4M funding round; if investors on the level of Greylock are handing it money, something’s afoot in this sector.

The two services are virtually identical, asking users to check in via their cell phone at spots around town. Foursquare awards mayor-ships and badges for frequent use, while Gowalla scatters pins and offers items to drop at locations. (For a closer look at feature sets, check out Josh’s recent post.)

Why would one do this? Well, it’s a bit like Twitter, in that you don’t get it until you’ve tried it. But the overall philosophy is to create a network of known places in a town, allowing users to find each other on the fly and leave tips and deals about certain spots.

To conduct my due diligence, I reasoned that a thorough test over the holidays made sense. I’d be in several different cities and could put both services through the ringer. I lasted one weekend. The comic effect of sitting in my car everywhere I went, bringing up two apps and going through the steps to check in, was simply too much. And I’m positive it was annoying for those who are friends with me on both services.

On Saturday afternoon, I took my daughter to The Nutcracker at the Long Center. Gowalla couldn’t find my “passport” (user account) as I sat in the parking garage so I abandoned the pursuit; my 4-year-old was protesting, “Mommy, what are you doing? Let’s go!” During intermission I tried again, this time with success. After checking in, the service asked me to “drop” something. Drop something? What the hell does that mean? Who’s going to pick it up? I chose a Beatnik Poet, clicked the ‘notify Facebook’ option and moved on. No idea what happened to the poet; hope an item with disparate philosophies isn’t harassing him.

The rest of the weekend went about the same, with Foursquare getting the bulk of the check-ins. Only when I had a bit of downtime did I use Gowalla. I simply didn’t see the point. I have more friends on Foursquare, know the interface better and get the rules of the game. In this regard, Foursquare wins hands-down; it’s easier to get going and immediately understand. Gowalla features several catchwords that I haven’t parsed yet: pins, stamps, item drops, etc. If it’s going to spread effectively to consumers, the service needs to be easier to jump into cold.

Foursquare has its negatives of course. An annoying Twitter/Bit.ly conversion bug results in the posting of mayors’ pictures on my Facebook page. So when I’m having coffee with a friend at Once Over, the accompanying image in my newsfeed is of a random stranger. (Foursquare is aware of this, but blame Twitter and say they can’t fix it.) Adding a Facebook notification feature would partially solve this problem. And its process for adding new locations is unnecessarily complex. Seems to me it would be easy enough to pull addresses from Yelp or a similar service so that you’re not required to input all the data on your own.

But at the end of the day, I’m sticking with Foursquare. It simply has the leg up. Not fair perhaps, but until Gowalla tempts me with particularly engaging and notable features, I don’t have a compelling reason to shift all my friends and energies.

And here’s the thing: this is a space that is going to merit our energies in the coming months. Take a look at these two recent posts and note the common thread: Yelp. The primary competitor for Foursquare and Gowalla isn’t necessarily each other; it’s Yelp. And Om is right on the money that Yelp should be worried.

Yelp is currently my yellow pages. I use it in place of Google for all local business searches. But its personal reviews and ratings lose any attraction if I have a catalog of recommendations from trusted friends on an alternate service. And that’s where Foursquare/Gowalla/Bobs Yer Uncle is going to win. Did Yelp walk away from Google because they’re smart enough to recognize this? Are they planning their own acquisition? Or were they foolhardy, thinking they’ve got a lock on a market that is sliding out from under them?

I’ve had pneumonia the past month so haven’t been much for drinking. When friends came over this weekend, we joked about when I would start testing my liver again for the holidays. Finding myself at Chuy’s last night with my family, I did a quick check-in on Foursquare. Five minutes later, that friend texted me, telling me that Chuy’s mojitos were excellent and a perfect way to inaugurate my holiday imbibing. (She was quite right.)

I suppose I could’ve powered up the Yelp app at the table, searched for Chuy’s and paged through the reviews to find drink recommendations. But no one on there knew my background, my drink tastes, my prior conversations. The power of linking businesses to personal networks, and exploiting those personal connections without being intrusive, has been a nut that’s needed cracking for some time now. Foursquare and Gowalla have cracked it. Whether the market is big enough to hold both of them remains to be seen.