UPDATE (9:21 am): Gowalla CTO Scott Raymond commented below to say that venue matching (inexplicably) wasn’t turned on at launch this morning, but is on now. I’m still having the same problems with venue matching, however.

Gowalla this morning released version 3.0 of their app in the iPhone app store. It came with one big surprise: integration with foursquare. Now when you check in using Gowalla you have the option to also push your checkin to foursquare, as well as Facebook Places, Twitter and Tumblr. You can also view your friends’ checkins whether they were made through Gowalla, foursquare or Facebook. The integration, while a bold move on Gowalla’s part, is executed poorly, especially compared with other apps that have already gone down this route.

Of the two rivals, Gowalla has always been known as the more beautiful service, while foursquare has played heavily on the gaming aspects — and their much larger user base. Gowalla has made a bold move by integrating with their larger rival. Gowalla CEO Josh Williams told TechCrunch that they went this route because they’ve found that many users loved the design of Gowalla but most of their friends were using foursquare or Facebook Places to check in. This move gives Gowalla uses the best of both worlds — the beauty of Gowalla with the ubiquity of foursquare and Facebook.

Unfortunately, the foursquare integration is handled poorly. Williams told TechCrunch they’ve already done much of the heavy lifting to match up venues between the services, but in testing, that’s clearly not the case. In all three of my test checkins the venues were not properly tied together despite the venue names matching exactly. Other services, like FootFeed and TriOut that have already added foursquare integration allow you to match the venues yourself if they don’t find a match, but there’s no way to do this with Gowalla. You’re simply left with location-less checkins on foursquare with no notice from Gowalla. Without being tied to a venue, you won’t be eligible for badges, mayorships or points and your friends won’t be able to tell which Starbucks you’ve checked in to, only that you’ve checked in at a Starbucks.

This integration has been accomplished solely through foursquare’s API, with no help from foursquare. Mashable’s Ben Parr speculates that foursquare could react by blocking Gowalla from the API, but that’s unlikely to happen. They’ve repeatedly encouraged other developers — even rivals — to integrate with their place database. In the end, more checkins, no matter the source, help foursquare as they work to build the data behind business analytics and recommendation engines for their users. Crowley has already reached out to Williams on Twitter about the venue matching issue, asking “how can we help?”

Gowalla’s v3 update adds a few other nice features, including the ability to leave notes at specific venues for friends when they check in. You could, for instance, leave a reminder or a love note for someone that they’ll only receive when they check in at that venue. The update also adds a new UI, with checkins brought to the forefront and streamlined to a two click process for most venues. Gowalla searches nearby venues to find the one you’re most likely visiting and presents it for a quick checkin.

Interestingly, the update also seems to loosen Gowalla’s distance requirements for checking in to a venue. Previously you’d need to be in very close proximity to the spot’s pin in order to check in, which often resulted in frustration if your GPS didn’t find your location perfectly. In my testing today, however, I was able to check in to venues several miles away with no problems. Gowalla supporters have touted Gowalla’s strictness as an advantage over foursquare, which they feel is overrun with cheaters who check in to nearby venues from their couch. It will be interesting to see how the Gowalla user-base reacts to this foursquareifcation of their service.

In the end, Gowalla’s integration with foursquare is a good move to keep people using their app instead of switching to foursquare. It could also result in some new users who are drawn by the looks, but don’t want to leave their friends on foursquare and Facebook. The integration will need to be better, though, to keep those users coming back and using the app. Location-less checkins simply won’t cut it.

The update is available in the iPhone app store today.

What do you think of Gowalla’s move to integrate with foursquare? Have you had any luck getting venue’s to match up?

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