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Facebook has refused to comment on the deal stating that the company does not comment on rumors and speculation.
Fledgling Gowalla attempted to take on the location sharing leader, Foursquare without much success. Facebook also launched Facebook Places in August 2010 to co-opt the location-based status updates trend.
Gowalla, which has raised $10.4 million to date from backers including the Founders Fund, Greylock Partners and a collection of angel investors, first launched at SXSW 2009. It recently shifted focus from being a check-in service, to an app that helps create travel stories. According to CNN, most of Gowalla's employees, including founder Josh Williams, will move to Facebook's offices in Palo Alto, California, while others will stay in Austin, Texas and work out of Facebook's local office there, as the acquisition was made to help with Facebook's new Timeline feature.
The acquisition is a part of Facebook's takeover strategy to build up its talent bench where in, it aims to make about 20 acquisitions in 2011, including Beluga, Hot Potato, Drop.io, Snaput, Digital Staircase and more than a dozen others.