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If you’ve been reading TechCrunch this week, you’ll know (or be annoyed by repeated claims) that this year’s SXSW conference will be all about location-based mobile apps. They’ve dubbed it the “location wars.”

Everyone is doing and thinking about location targeting and mobile. Twitter has been doing it for months with its geolocation API and Friday went live with automatic location tagging (opt-in) on its own domain. Loopt and others in this space have been doing it for years, while Facebook and Google loom quietly.

Meanwhile, usage skyrockets. Foursquare has 500,000 users and had its biggest day yesterday with more than 250,000 check-ins. Anecdotically, I went from being the only one of my friends using Foursquare three months ago, to most of my extended social circle now using it (and fruitlessly competing for my mayorships — yes you, Jen).

But the interesting part is how mobile location apps have evolved. Based on privacy and other issues, the check-in has replaced pervasive location tracking as the catalyst for communication. It’s a clever form of opt in. Realizing this, other leaders in the mobile local space such as Loopt and Yelp have integrated check-ins in the past few months.

For the local space, this is relevant because check-ins revolve in some way around physical places — often a business — rather than a meaningless lat/long reading. The next step, of course, is monetization. How do you create a lead out of someone raising his or her hand and saying, “Here’s where I am, and (by implication) here’s what I’m interested in?”

Foursquare has begun to turn check-ins into leads, as have MyTown and Brightkite. And more check-in services continue to come out of the woodwork (see Causeworld). Many will die in an inevitable shakeout, but the overall trend is here to stay. More importantly, this will be the basis for new monetization structures that take form in the coming months.

Of course, none of this is terribly new; we and other local analysts have been eyeing it for some time. But it’s reaching mainstream awareness (Foursquare’s TV ads don’t hurt). Over the next 10 days, SXSW will cause a bump in usage that will bring it even closer to the mainstream — or closer to the questionable $12.7 billion LBS market that Juniper Research predicts for 2014.

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