The "Places" feature will post users' locations to their walls when they update their status from a mobile device. The concern is that the same GPS technology that allows smart phone users to access driving directions could be used to give away their locations.
Facebook CEO Mark Zuckerberg is assuring users that they will be able to control their privacy and will be able to remove their location later.
The new feature will introduce Facebook's 500 million users to the world of location-based social networking. Other companies with similar services like Foursquare welcome what Facebook is doing.
Richie Aranda is a Foursquare user. He checks in wherever he goes.
"It's kind of addicting, it's like Facebook, I want to find out where my friends are, what they're up to, maybe I can hook up with them later on that day or later on that evening," he said.
Aranda is also the manager of Henry's Hi-Life, a popular downtown San Jose eatery. He is using Foursquare to promote his business by offering an electronic coupon for a free drink when they check in on Foursquare for the 10th time.
Knowing where people like to go, places they like to patronize and what they like to buy is valuable information for advertisers. As smart phones proliferate, Facebook and others want to make money pushing targeted advertising much the way Google does when people use its search engine.
Some will argue geo-tracking could be intrusive. Privacy is still a hot-button issue.
"There are people who would love to know where you go that you don't even know," technology futurist Paul Saffo said. "People think about the stalker scenario but in fact it's the intrusive 'Little Brothers' that would like to see where you hang out and what your shopping habits are and what you're interested in."