• by Mark Walsh  @markfwal, March 9, 2010

As location-based social networks like Foursquare gain traction, Facebook is getting ready to jump into the game by allowing users to share their location with friends. According to a New York Times report, Facebook will introduce a new location-sharing feature next month during its f8 annual developer conference.

The move was foreshadowed in Facebook's updated privacy policy in November, when it added language stating: "When you share your location with others or add a location to something you post, we treat that like any other content you post." The company at that time also stated that if it offered location-sharing, it would allow users to choose to participate on an opt-in basis.

Facebook declined to comment on the Times report Tuesday. "We are constantly experimenting with new ideas and products internally. We don¹t have anything more to share at this time," a company spokesperson replied in an email.

The company has been working on a location-based service for nearly a year, but has waited until the new tool was ready for widespread adoption before announcing it, according to sources familiar with the project cited by the Times.

The location feature will have two basic components: the location-sharing capability offered directly to Facebook members and a set of APIs (application protocol interfaces) for third-party developers to add location-based elements to their Facebook apps.

The news comes as social location startups like FourSquare, Gowalla and Loopt gain wider appeal among mobile users and begin to gear up their ad-based business models. In that vein, the Times earlier Tuesday reported that Foursquare plans to roll out a free analytics tool and dashboard in the coming weeks that will let business owners track statistics about visitors to their establishments. That information could help them target ads or promotions to users of the service that award points based on how often someone "checks in" to a given venue.

But Facebook apparently wants to go after bigger game in the form of Google, which has launched a variety of location-based features starting with friend-finder Google Latitude last year. More recently, the search giant has introduced NearbyNow, for finding nearby businesses, and the mobile extension of Google Buzz, letting users post their location with brief messages. Both online powerhouses plan to use their respective location-based offerings to unlock local ad dollars.

Facebook says it already hosts more than 1.5 million pages for local businesses worldwide. And earlier this year, Google last fall launched Place Pages allowing small businesses to provide more extensive information within Google Maps.

The emergence of location-based services has also brought with it concerns about the privacy aspects of these applications. The U.S. House of Representatives two weeks ago held a hearing on the collection of location information for commercial purposes. Any future privacy legislation would also likely address the issue.