Focus Media’s CEO, Jiang Nanchuan, said in his microblog, that Focus Media is working some form of LBS.  It would be integrated with Focus Media’s digital displays units, which are found in many office buildings and residential complex in China.   (Here is an article about it in local news: http://tech.sina.com.cn/i/2011-03-20/19495308277.shtml)

Jiang is not too specific with the details.  But it seems like people can use their phones to interact with the advertisements on the digital displays.  They can perhaps make a purchase orders, or download coupons, etc.  Jiang said the service will be ready by the fourth quarter.

Actually, I’ve seen something similar in concept from a startup.  It is called Getbuz, http://www.getbuz.com/.  It installs a box like device in a shop.  When people wipe their phone over the box, they can get some discounts at the shop, but a message is posted in their Facebook account saying he/she has made a purchase in the certain shop.  So to consumers, it is promotion for discount.  The founders (Lorcan McNeela and Caomhan Connolly) said when they tested run Getbuz with local coffee shops and other retailers in Boston. It was quite welcomed by the shop owners.

Getbuz was one of the six startups incubated by the Chinaccelerator program last year. Here is an earlier post about them and the program:

Dalian-based Startup Accelerator, Chinaccelerator Launches Six Startups in Beijing

Calling The Angel, MOBINODE Partners With ChinAccelerator