Social networking giant, Facebook has continues to expand its equity by acquired Gowalla, a location sharing service.

Photo: Facebook users can sign up to Gowalla with using their account,
a snapshot from Gowalla’s frontpage

The sum of the deal is undisclosed but its known that most of Gowalla’s employees, including founder Josh Williams, will move to Facebook’s offices in Palo Alto to work on Facebook’s Timeline feature. The Timeline was presented at this year’s F8 conference and is currently rolling out to Facebook’s 800 million members. Some Gowalla employees will stay in Austin and work out of Facebook’s local office there.

The Gowalla team will be working on Facebook Timeline, with most of the team moving to Facebook’s Palo Alto headquarters and some remaining in Gowalla’s hometown of Austin, where Facebook has an office as well, CNN reported.

Gowalla, which has raised $10.4 million to date, first launched at SXSW 2009 — going head-to-head against Foursquare, with a stronger emphasis on virtual goods (and nicer icons) than their competitor. But Foursquare overtook Gowalla in popularity by a large margin, prompting the startup to reinvent itself earlier this year.

The new product moves away from displaying a time-based feed of your friends’ recent check-ins, and focuses instead on creating Stories around the places you and your friends have visited, clustering together photos that show off your adventures (there is also a Guides section that lays out where you should visit in a given city).

In other words, it’s not too dissimilar to Facebook’s Timeline feature, which is also designed to group clusters of activity into more cohesive stories, as opposed to just a reverse-chronological feed. And it would make perfect sense for Facebook to start featuring location checkins and photos tagged with GPS coordinates into Timeline stories.

According to CNN, the Austin-based Gowalla was launched in 2009 as a sharing service but lost in a competition with Foursquare. Recently, Gowalla started to position itself as a geolocation service. The site had raised around $10 million over the years from backers including the Founders Fund, Greylock Partners and a collection of angel investors.

The Facebook’s deal has not yet been publicly announced yet but the source that preferred to stay anonymous commented saying: “It’s a perfect match. As far as the big picture, Gowalla’s vision is about people telling stories, and Facebook’s vision for Timeline is about stories about important moments in life.”

Facebook is famous for buying promising startups and killing them off to deploy their engineers and developers on other projects. Its hit list includes Beluga, Hot Potato, Drop.io, Snaptu, Digital Staircase, among more than a dozen others. Probably, Gowalla has the same destiny, on the Facebook’s profit.