The New York Times' Nick Bilton today broke the news that Facebook will be incorporating location-based updates into users’ news feeds beginning next month. According to Bilton’s sources, the social networking site will deb

ut the location-based service at next month’s f8 developer conference in San Francisco.

The battle of location-based services is supposed to be one of the highlights of next week’s South by Southwest (SXSW), where Foursquare famously got its first bit of major buzz last year. Now, along with duking it out among themselves, Foursquare, Gowalla and MyTown will have to take on the major players in social networking.

While Facebook's move could definitely affect traffic to the other services, Bilton’s sources say that Facebook’s move is aimed not at other location-based social networks, but at Google’s local ads.

As far as Facebook goes, most of its audience are not early adopters, but have proven eager in the past to try out features culled from other services. One-quarter of Facebook users are already using the site on their mobile phones, so the user base for location-based social networking is already there. And since people are already logging in on the go, so there’s no extra steps required on their part.

Also built in is the market for any Facebook games that could be built on top of the technology.

While they’ve been getting a lot of buzz in geekier circles, location-based services have not yet caught on with mainstream users. As with Twitter last year, it’s only a matter of time before they do, and Facebook is perfectly positioned to bring location-based services to critical mass.

One of Facebook’s main strengths is that it acts as a clearinghouse for new social-networking technologies, so expect location-based services to accelerate in adoption when users of the one of the most powerful sites in the world start to play around with them.

By Mark Alvarez