Facebook buys Gowalla in expansion drive

Facebook has bought location-based travel service Gowalla for an undisclosed sum and is planning a massive recruitment drive in 2012, both signs that the social network is continuing to focus on expansion as competition in the social media space continues to grow. The purchase is an ‘acquihire’, with Facebook hiring the staff behind Gowalla but shutting down its app at the beginning of next year. Gowalla’s team will work on Facebook’s Timeline feature, which launched at the F8 conference and is slowly rolling out to new users to replace the current Facebook profile page. Gowalla CEO Josh Williams says talks about a Facebook acquisition began shortly after f8, although it is understood the firm has been looking for a buyer for some time.

“About two months ago, my co-founder Scott and I attended F8,” says Williams in a blog post. “We were blown away by Facebook’s new developments. A few weeks later Facebook called, and it became clear that the way for our team to have the biggest impact was to work together. So we’re excited to announce that we’ll be making the journey to California to join Facebook!”

The acquisition comes as Facebook announces plans to expand its staff numbers, opening a major new software engineering centre in New York in early 2012. Headed by Serkan Piantino, who previously led the team behind the news feed, the new office will be Facebook’s first software base on the East Coast, although the firm already has an ad team in the city. New York is attempting to build up a tech hub in the city, similar to Silicon Valley in San Francisco, with firms such as Foursquare, Spotify and Tumblr already located there.

Both the acquisition and new software base highlight Facebook’s plans to continue growing as it heads towards an IPO that is expected in the early part of next year. The social network already has 800m members globally but is focussed on hitting 1bn by targeting emerging markets such as Brazil, India and the Philippines. “We are trying to grow at a clip that will allow us to get the very best people and integrate them,” says COO Sheryl Sandberg, speaking at a press conference in New York. “We will be adding thousands of employees in the next year.”

Gowalla first launched at the SXSW conference in 2009, offering its users virtual goods in return for checking-in. However its popularity failed to keep pace with Foursquare, which now has some 15m users, and the firm reinvented itself earlier this year. Gowalla now offers an app that creates stories around places users and their friends have visited, enabling them to check-in via services such as Foursquare, Facebook Places, Twitter and Tumblr. The service is not dissimilar to Timeline, which also aims to build stories from users’ activities, with Facebook possibly looking to integrate location check-ins with the feature.

The majority of the Gowalla team, including Williams, is now set to join Facebook’s offices in Palo Alto, although some will remain in Austin, where Facebook also has a presence. Gowalla says it will be shutting down its service at the end of January, although users will be able to export any data they have uploaded, as well as their photos. The firm is keen to point out that Facebook is not acquiring Gowalla’s user data, with the acquisition a continuation of Facebook’s ‘acquihire’ policy, in which the social network buys startups for their team rather than their technology. Gowalla has previously raised USD10.4m from investors including the Founders Fund and Greylock Partners.

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