Foursquare and Gowalla dueled for supremacy here while fresh rivals such as Tweetsii and Toodalu vowed to eclipse them.
FourSquare and Gowalla launched last year at SXSW, a renowned gathering of musicians, film makers, and entrepreneurs quick to find creative uses for new Internet technologies.
FourSquare and Gowalla take advantage of satellite location capabilities of smartphones to let friends share where they are.
The competing services also weave in addictive game aspects by letting users gain status by collecting virtual "badges" along the way.
"Location-based services are big," said Israel Mirsky, executive vice president of emerging technology at public relations firm Porter Novelli.
"FourSquare and Gowalla use game methods to keep people engaged but they are ultimately utilities because they help friends find each other."
Porter Novelli was holding a first-of-its-kind scavenger hunt at SXSW incorporating smartphones and augmented reality.
People were challenged to scour the streets of Austin, a bar-rich college town that also serves as Texas' state capitol, for 3-D images only visible through camera lenses of GPS-enabled smartphones.
"You hold up your phone with the game application in it and the pieces will appear floating in the air," Mirsky said. "It is like being in a real-world videogame."
Whoever finds the most icons will win 1,000 dollars.
On a SXSW show floor startup gypsii showed off a new Tweetsii application for Apple's popular iPhone smartphones, the mobile device of choice for most folks at the gathering.
Tweetsii aggregates posts from FourSquare, Gowalla, and microblogging star Twitter to let users know not only where friends are, but what they are saying about being there.
"It allows you to find out what is going on, what is hot and nearby," gypsii vice president of strategic accounts Jay Cahill told AFP.
"What Google and Bing are doing trying to search and index what is available from the Web, we are doing that for the real world."
Tweetsie also serves up archived data, so people can see what friends thought of a place long after they are gone.
"Location is one part of the equation; relevance is much more important," said gypsii social media manager Tom Schuyler.
"It should be the conversation happening at the place. Your friends might be at the restaurant, but did they enjoy the meal?"
Unlike FourSquare and Gowalla, which provide location data regarding only friends inside the respective online community, Tweetsii shows whereabouts of friends from both services as well as what is being "tweeted" in the area.
Gypsii just launched a "newsbot" that harvests news from the Internet and then delivers stories to smartphones based on where they happen to be, according to Schuyler.
"I can see news stories that have happened around where I am," Schuyler said, pulling out his iPhone to back his words.
A short distance away toodalu.com was demonstrating a service launched Friday that uses maps to let iPhone users quickly see where friends are who are also members of the mobile social networking community.
"We are all about maps," Adams said. "We visualize the entire experience. You click and see the names and faces of who is there in real time."
Toodalu lets users upload pictures, so friends can get a glimpse of the scene.
"It's the next wave of social connecting," Adams said of location-bases services for smartphones. "It is going to be huge and somebody is going to emerge as the Twitter of location."
Twitter, which debuted at SXSW in 2007, added location features a few days ago. Social-networking powerhouse Facebook is expected to add a location component to its service at a developers conference in April.