Facebook believes its location-based Places service will open up advertising potential. (Adrian Wyld/Canadian Press)

Facebook users carrying their smartphones will soon be able to "check in" to real-world locations such as bars, parks and live concerts as the social network makes its first foray into the location services craze.

"Where are you?" is joining "What's on your mind?" as Facebook lets its users declare their whereabouts to their friends and people nearby.

With the much-anticipated launch of Facebook Places late Wednesday, the world's largest social network joins a growing number of services that let users find coupons, earn quirky merit badges or simply share with friends where they are.

These location services from various startups, including Foursquare and Gowalla, have grown in popularity with the widespread availability of smartphones that have GPS and other means of determining the user's location.

Facebook's version initially works through the site's iPhone application; users will need to download a free update of the Facebook app. Owners of other touch-screen gadgets can get the feature through visiting touch.facebook.com on their mobile web browser. Facebook says it will add Places to other smartphone apps later.

Privacy concerns noted

As with any new Facebook product, privacy issues figure front and centre into Places, but this time the company appears to have erred on the side of caution.

"Following the flaps created by earlier launches, Facebook seems to be taking a more moderate approach to location sharing," said Jules Polonetsky, a former AOL executive who now co-chairs the Washington-based Future of Privacy Forum. "Just about everybody recognizes location as something that you want to be in control of."

By nature, check-ins are "opt in" — that is, you won't be forced to check in to a location if you don't want to. When you do, your check-ins will be shared with your friends by default, but not the broader public unless you decide to do so.

If you're out and about with friends, you'll be able to "tag" them using the "at" symbol, much the same way you can already tag them in your status updates. Your friend will then be notified that you have tagged them and can choose to check in too, or reject it.

A feature called "Here Now" lets anyone who has checked in to a place see who else has done the same. Other Facebook users who have checked in to the same location will be able to see you even if they are not your friends, but you can turn this feature off.

The first time you check in, a message will pop up letting you know that your locations will be visible to your friends and to others who have also checked in there. You'll need to either accept or deny this.

"In the past, what created flaps is that people were pushed to share more, or they were surprised they were sharing what they [didn't think] they were sharing," Polonetsky said. Places, meanwhile, "seems to logically reflect what users expect."

Commercial potential

Though they are still new, location services present "endless possibilities" to businesses, eMarketer analyst Debra Aho Williamson said.

"Marketers want to reach consumers when they are at the point of making a purchase decision and locations services offer that opportunity," she said.

It also holds promise for shoppers — if they are willing to share their location with nearby businesses.

"If you are out shopping and you check in somewhere and can immediately get a deal, that's a win-win for you and the marketer," Williamson added.

On Foursquare, for instance, Starbucks has offered $1 discounts to the "mayors" of its local coffee shops — that is, people who check in the most often — as a reward.

Even so, it could take some time before checking in becomes as common as posting photos and adding status updates. Although Facebook's iPhone app has more than 20 million active users, and a similar number use the touch.facebook.com site from another touch-screen phone, that's still a small portion of the 500 million users Facebook has worldwide.

About five per cent of U.S. internet users say they have used a location-based service such as Foursquare or Loopt, according to a spring survey from the Pew Internet & American Life Project.

Facebook created Places by looking at the way people already use the site, said Ana Yang Muller, product marketing manager at the company. Users have already been saying where they are, and who they are with, in their status updates. Places is a natural extension of that by making location easier to declare with a check-in.

Unlike Foursquare, Facebook has opted not to make Places into a game. There are no mayorships or merit badges — only socializing. But rather than try to squash the smaller location startups, Facebook is partnering with them to integrate their services into Places so that users can check in to Gowalla, Foursquare or Yelp and share it on Facebook.

"This basically validates that we are on to something," said Holger Luedorf, a vice-president at Foursquare, at Facebook's headquarters in Palo Alto, Calif. It shows, he said, that "this will be a much bigger thing going forward."

Facebook says it will eventually let restaurants or shops claim their locations, which could open the possibilities for targeted ads, deals or coupons for loyal customers.