Best Apple (AAPL) iPhone App So Far: Pelago's Whrrl

Kingmaker VC firm Kleiner Perkins has been scouring the world for awesome Apple iPhone  (AAPL) apps, reviewing 1,700 business plans for its $100 million dedicated iPhone iFund so far. Its top pick to date? Pelago’s Whrrl. BusinessWeek:

Pelago’s software, called Whrrl, ties the mapping capabilities of the iPhone and other smartphones with the ability to find information about places where you, your friends, or anyone has been…There’s going to be a “what’s going on around me right now” button, says Kleiner Perkins partner Matt Murphy. “You’re always one button away from that immediate context.”

Our take? Sounds good (and way better than most location-based apps, which sound cool until you actually think about using them). The key will be generating a critical mass of “friend” (or at least trusted) reviews.

Meanwhile, Pelago will eventually need a business model. The current plan is to track users’ every move and report this information to advertisers:

To make money, Pelago hopes to create a more effective marketing platform for advertisers. By mining data on users’ wanderings, Pelago could let advertisers target people based not on what they say they want, but on what they actually do. “It’s voting with your feet,” says Holden. If a coffee shop finds out that you go to Starbucks every morning, it might offer you a week of free Joe. If a restaurant knows you’ve checked out its menu several times, it could offer you a free dinner. Over time, instead of paying a nominal amount whenever someone clicks on their ads, advertisers might agree to pay far more—but only if the person actually comes to their store.

Brace for consumer and user privacy screams.

Kleiner has invested in one other iPhone startup so far: “iControl, which makes a home automation application that would give iPhone users remote control over air conditioners, lighting, window shades, and so on.” It’s looking closely at another 10.

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