We’ve previously discussed the emerging trend of this year, location based social networks. Last year, Twitter and micro blogging were the trending topic on everyone’s agenda, and this year the shift was made towards geo localization.

For companies, the benefits of knowing exactly where their potential customers are located are enormous. While in Twitter’s case, it had to grow organically, it is very likely that in the case of social networks, like Foursquare or Gowalla, companies will help them to out. The advantages they could achieve using location based social networks are far too important to let the opportunity slip away.

Since their appearance, location based social networks have been in the spotlight of all the social media scene and the hopes of the industry have been fed by the incredible growth and adoption rate this networks have accomplished in a short time. Although everyone praised the success of Foursquare or Gowalla, questions were raised about when the giant of social media, Facebook, will step into this  location game?

With the discovery of some code, and the confirmation that came afterwards from Facebook’s representatives, the answer for that question was finally offered to an anxious audience awaiting a move from the biggest social network.

What will happen next?

The Facebook announcement gave space to all kind of speculations regarding the future of location based social networks, and how the other players on the market will react, and even, if they will survive.

It’s far too early to have a clear opinion about what will happen because the Facebook product hasn’t even rolled out yet. However, some scenarios can be discussed, read on below:

Facebook will take over the whole market

Facebook has more than 100 million people using Facebook mobile. This translates into more than 100 million people who will be offered the possibility of using this feature. That is more than 100 times Foursquare’s audience. We can assume that from those 100 million more than 1 million will decide to become core users of the new feature, so this leads towards Facebook becoming the main player in a short time. There are users who might convert to Facebook’s feature just because they could benefit from a social network that allows them to enjoy a rich user experience, rather than login in to two different services. Mobile users of Facebook are focusing a lot on speed and appreciate the benefits of using an all-in-one application. Considering this scenario it is obvious that Foursquare and Gowalla don’t stand much of chance against Facebook.

The new location feature will raise another round of concerns regarding privacy issues

Facebook is already struggling with all the privacy issues raised by the Open Graph and the fact that a wide range of information about Facebook’s users is available to the whole internet by default. Although, Facebook mobile users are usually more aware and conscious of Facebook’s privacy settings, introducing the location feature might just bring another series of complaints from those protecting users’ privacy rights.

When people sign in for Foursquare they are aware of what using the service might mean in terms of privacy, or at least the majority of them. Foursquare is a new social network in which the users that have signed in so far are people actually interested in the service or avid followers of all the trends in social media. Signing in to Foursquare implies an action from the users. So the initial incentive comes from the user. The user decides who his friends are, and the service doesn’t reveal any information about the place a user has checked-in, by default.

Considering Facebook’s previous actions, it could be easily assumed that the users who will decide to use the service offered by Facebook are going to be sharing their location with all their friends on Facebook. In their attempt of funding an open web, the social network has previously shared by default other information about its users, so it would come as no surprise if the feed from those using the places tab would be redirected to Facebook feed and shared with all the users. In this case privacy issues could be raised, because what Facebook would be doing would be the exact opposite of Foursquare’s strategy. Instead of attracting users to sign in by their own will, Facebook will become “a door-to-door” vendor persuading users to use the service and make it popular among other users.

If everyone took into account these considerations we could assume that users might feel reluctant to use the new feature, and this would result in a scenario where smaller players have time to develop, while Facebook will struggle to attract users.

Foursquare and Gowalla will be niche tools, while Facebook will dominate the mass market

Part of the success that Foursquare and Gowalla benefited from was due to their efficient mechanism of determining how users sign in and use the service. Foursquare’s badges and points system gave users an incipient incentive to continue to sign in. With the help of social media marketing these companies popularity grew. What fashion-freak wouldn’t want the Marc Jacobs badge?

What mechanism Facebook will invest to attract users has yet to be seen, but another scenario we could elaborate would be the one where Facebook’s “Places” tab will become the mass market tool, while Foursquare and Gowalla will keep their faithful users that still engage with the mechanism provided by the two.

We are curios to find out how do you see this issue? Will we have one winner or many winners in the location feature battle?