Facebook: The Sleeping Giant of LBS

Location-based services continue to roll out left and right. TechCrunch won’t stop saying this year’s South By Southwest conference will be all about location (except for this contrarian piece by Paul Carr). We mostly agree.

But with all the start-ups crowding the space and rapidly growing, albeit from a small base, Facebook looms as the category killer. With 400 million global users (100 million of them active mobile users), it could have quite an impact when it inevitably “turns on” geolocation for status updates.

There’s been speculation about when it will do this, including here. But today, the first tangible signs were shown in a New York Times Bits post that quotes unnamed sources within Facebook. The venue for the launch will not surprisingly be the annual F8 developer’s conference in April.

The update will involve some form of automatic geotagging for the status updates that have become the main dish of the social network. Like Twitter has done with its API (and today on its own site), this will automatically append status updates with location.

This will be based on GPS, Wi-Fi triangulation, IP address, explicit notification (think Foursquare-like check-ins) and/or users’ account information. Like Facebook’s recent regulation of status updates, it will also undoubtedly be governed by users’ opt-in privacy settings.

That last part is critical, and involves one of the reasons Facebook has taken a relatively long time to do this. With a company like Facebook that has all eyes and forms of scrutiny on it (especially being a social network), nearly all moves are met with privacy backlash.

So with new feature rollouts, it’s one step at a time to not rustle too many feathers. And of course location tagging is at the top of the list of privacy advocate seething factors. We’ll see what this eventually entails, but for now you can be sure that when location gets turned on, it will be huge.

The third-party apps and sites that utilize Facebook Connect will plug right into this, and there will be lots of implications for the local space. The Times agrees, stating this will be less of a threat to the Foursquares of the world than to Google’s local efforts — an area Facebook as been eyeing for a while.

One of the people familiar with the project said the company was not trying to beat the smaller location-based social networks, such as Loopt, Foursquare and Gowalla.

Instead, Facebook wants to go head-to-head with Google in the fight for small-business advertising. Facebook redesigned its business pages last year, with the hope of offering more features for small-business owners. According to Facebook, the Web site currently hosts more than 1.5 million local businesses from around the world.