It’s that time of year again when our “live music capital of the world” (Austin, TX) decides to multitask and become the temporary epicenter of all things film, music and digital. Being based downtown, we welcome the SXSW visitors to our neighborhood and can’t wait to get out and mingle with some of the best, brightest and most innovative companies in the industry.

SXSW has developed a reputation in recent years for being the hotspot for startups to launch their products and innovations, particularly pertaining to social media, digital influence and distribution. In 2007, SXSW witnessed the launch of Twitter, then in 2009 Foursquare emerged. It then proceeded to grow at an unprecedented rate for internet-based startups. Last year was expected to be the year of location-based services, however, no one company managed to gain significant traction and emerge a head of the crowd.

My prediction for 2011? Location will finally become the driving force it has been striving to be for many applications and services. Foursquare has already been creating buzz around advanced location based services within their product, possibly offering coupons and more control for their enterprise customers. But will they remain king of the location based applications? Or will they be swept aside by the next big thing to hit digital media since 2009?  Gowalla is also trying to become a major player, as they have partnered with Mashable at SXSW.

We will be watching closley and will follow up next week with our favorites from the festival and the companies we think you should watch into 2011. In the meantime follow our team members as they tweet their way through the festival:  @ReneeFrancese, @PaulWalker, @AustinBNelsen, @BrittanyAguilar and @JeffRobertHunt

Cheers and welcome to Austin!