Location networking received a lot of hype over the past year or two. Gowalla, Foursquare and other services used rivalry, competition and status to enhance their esprit de corps amongst the early adopters. Yet, the chances of achieving a breakout appear less than they do for Twitter. Then again, who ever thought a 140 character limit was attractive.
My hunch is that Foursquare and Gowalla and similar services are going to need to adapt to survive. Why? Because most of the world does not really care about mapping their check-ins to let their friends know that they are grabbing coffee down the street. What people do care about though is getting local discounts and scoring a good deal on purchases. People want value, especially in this economy.