Facebook Moves Closer to Offering Location-Based Services
While Facebook's webmail project seems to have fallen through, the same cannot be said for the location-based services rumor. Everyone's favorite social network is thisclose to acquiring Hot Potato, an LBS, and other social activity sharing service. 

The Location-Based Services Craze

Facebook CEO Mark Zuckerberg and crew confirmed the upcoming LBS feature at a developer garage event in London back in June. Although, this was after rumors about the feature launching in April, and then in June. 

In fact, even though a deal with Hot Potato is reportedly almost in the clear, it's still a talent acquisition. Meaning, the newcomers would still need time to settle in and charge up their engineering hands (like jazz hands, but, you know, for engineers). 

Further, the competition is growing. This week Google stepped into the local and location game with the release of Google Places, a new layer of Google Maps for mobile that allows users to review nearby attractions, restaurants, ATMs, etc. The check-in functionality is not a part of the release, but that doesn't mean Google isn't planning on adding it at some point. Foursquare, which had acquisition talks earlier this year with Facebook, is still looking for a new home. Google, Yahoo and Microsoft are among the companies interested. 

Hot Potato

Hot Potato is nowhere near as big as Foursquare, but Facebook isn't lacking in the popularity department. The platform, now 500 million users strong, will provide viable competition for the LBS pool regardless of where the technology comes from. As a small startup, Hot potato would also be a better deal for Facebook than Foursquare. The company raised a modest US$ 1.42 million dollars in Series A funding late last year, so Facebook probably won't be shelling out too much if the acquisition is completed. 

The deal would be the seventh company that Facebook has acquired so far. FriendFeed was the first, nabbed up by the social network over a year ago (for a reported US$ 50 million), and the other five have all been made within the last six months.  

Is LBS Even That Great?

While many of us are going crazy over location-based services, some experts remain wary. Forrester Analyst Melissa Parrish noted that only 4% of U.S. online adults have ever used location-based mobile apps.

"Only 1% update these services more than once per week," she added. "What's more, 84% of respondents said they are not familiar with such apps, leaving the vast majority of Americans online still in the dark about location-based apps, which have had the marketing world obsessing over them in recent months."

LBS probably is that great, but the numbers say it hasn't reached its full potential yet. Facebook's up and coming tool will certainly work to change that.