The pastry example is really important. You can't just serve ads to people, they have to be targeted toward the users' interests. Perhaps they're based on your check-in history, but this won't convert well to sporadic users.

I don't know how the majority of Foursquare users use the service, but my friends and I pretty much only use it to check-in - at a place that we had pre-determined. There is no discovery or opportunity for an ad to capture my attention or push me toward a promoted business. If I'm going to get a burger I don't care about your pastry ad. But there's no way for Foursquare to get this information. Not without disrupting the check-in experience.

As has been suggested, I don't see how Foursquare can grow their ad network with this kind of usage. How can they convince businesses to sign on?