Every year has a startup battle, and in 2010 the king of those battles appears to be in location sharing, with Texas startup Gowalla taking on San Francisco’s Four Square. We’re betting that Gowalla is going to win, and here’s why.

Both Gowalla and Four Square launched into location sharing at around the same time in 2009, although Gowalla goes back to 2007 as a non-location sharing based application.

Four Square took the early lead, and at the end of 2009 was by far and away the most popular location sharing based application, at least by attention and publicity. But that statement needs context, because that attention was driven by the echo chamber of the tech blogosphere, and among the chattering tech classes Four Square was all the range.

But there was a little flaw in all that attention: Four Square, like many a geographically challenged company before it, didn’t realize that to win a battle, your market extended outside of a few big cities in the United States.

The slow, yet steady buzz behind Gowalla didn’t come from San Francisco or Silicon Valley, but from those outside the original half dozen cities Four Square originally supported. Indeed, it could be argued that Gowalla rode the coat tails of Four Square’s publicity, filling a hole across the rest of the planet where Four Square didn’t want to play.

Fast forward to March 2010, and the chattering tech classes descended on SXSW in Austin. Gowalla did have the home town advantage, however you’d think that the momentum behind Four Square would see it dominate.

If you thought that, you’d be wrong.

Most commentators are calling the location sharing battle of Austin a dead heat, with location sharing updates being split evenly between Gowalla and Four Square. The minnow was back in the game, and was competing against the far greater hyped West Coast startup.

Why Gowalla will win

Both services are nearly identical on the surface, with similar features. But Gowalla wins on substance.

• Forced GPS checkins: Four Square has a spam problem as it allows people to check in at a location without them being there. Gowalla doesn’t, and it automatically gains a trust factor in location sharing
• Depth of users: hardly scientific I know, but outside of the original half dozen cities for Four Square, Gowalla has a significant lead. Example: I’ve had 4 friend requests on Four Square in the last 2 weeks, yet I’ve had over 250 on Gowalla. When I reversed a search (that is looked to add friends) using my Twitter account as a base, Four Square offered around 100 suggestions, Gowalla was well over 300. Note there that being in Australia means that I have a big circle of friends outside of The SF Bay area and New York
• The game aspect: the emphasis on Four Square was its game aspect, which many suggested is why it became so popular. Gowalla has that aspect, but it’s not the emphasis of the service. Gowalla users tend to focus primarily on the location sharing aspect. Games are fickle and the novelty wears off, where as location sharing, like Twitter, should in theory last longer

Of course I could be entirely wrong, but the stats don’t lie: the momentum has switched to Gowalla, and with the tech echo chamber exposed to it at SXSW, I’d suggest that the buzz around Gowalla among the tech blogs is shifting; I only need to search Google Blog Search to confirm that.

Myself: well, I’ve never seriously used either (despite having accounts with both,) but I’m following the crowd to Gowalla; if that’s where my friends are, that’s where I’ll be.