A Conversation with Loopt's Sam Altman

Location-based services are a $1.9 billion business, projected to hit $3.8 billion by 2012, according to research firm Gartner. Since its launching in 2005, Loopt, a pioneer in making software for people to find each other on a map displayed on their mobile phones, competed mostly with other startups, including Foursquare Labs and Gowalla. Now the 45-employee Mountain View (Calif.) company faces a behemoth with a half-billion users: Facebook, which launched its own location-based service on Aug. 18. Sam Altman, Loopt's 25-year-old co-founder and chief executive, spoke recently with Bloomberg contributor Antone Gonsalves about how his company, which has 4 million users and more than $17 million in venture capital, is reacting; why Apple's iPad is unlikely to have much impact on Loopt; and the challenges of persuading small businesses to advertise. Edited excerpts of their conversation follow.

Antone Gonsalves: What was your gut reaction when you discovered that Facebook was going into location-based services?