Wait... People don't love location based apps?
blog.urbantag.com
blog.urbantag.com
Prime candidates for ongoing engagement with LBS are: people who travel a lot, people who are hungry for new and interesting stuff but don't know where it is , and people who are new to city (even here engagement will be limited).
For instance, hotels are famous for spending big $ for pay-per-click advertising. On the other hand, the fact that I'm looking at a map of an area or even if I'm roaming around in an area doesn't mean I'm necessarily interested in booking a hotel (perhaps I already did or I'm staying with a friend.)
If you think about a really busy urban area, there are thousands of things that I ==might== take an interest in within a half-mile radius. Winnowing all through that is a meaningful way is a difficult problem, and it might all be for naught if there's something ==really== cool that's 2 mile away and that's outside the radius the system is scanning.
It's early days with location awareness. We're still at the, "Ooh shiny" stage.
Location awareness is something to build on. But not the fact that I'm 823m from something, somewhere. To be useful, there needs to be much to it than that.