Facebook continues its quest for better location based services. First, Facebook Places and now, the acquisition of Hot Potato. There were speculations about Facebook’s interest in acquiring the location based service. However, the news was officially announced on 20th August.

Hot Potato started off as an event sharing service in November, 2009. It later evolved to become an activity-sharing network. The company has confirmed the acquisition on its own blog, announcing its plans of discontinuing the service. The masterminds behind Hot Potato will now be part of the Facebook Places development team.

Analysts, expect Facebook to progress in location- based services and perk up Facebook Places;

Looking further ahead, the influence of Hot Potato’s service could mean applying their experience with social check-ins across Facebook’s social activity. ‘Liked’ pages are at the moment only likable if they have the button, while Hot Potato lets users create their own activity or subject to check into, or like, effectively. There’s also a more real time element to Hot Potato than Like, and that’s something else that could be refined a little more for a Facebook equivalent of trending topics. Right now, much of that activity is hidden.

This acquisition is very important for Facebook, especially for the future of Places. One way to make the most out of this deal is to introduce a gaming component, such as those established by Foursquare and Gowalla. In an earlier post, as assessed by John Furrier, brands would be more inclined to advertise on Facebook through its geo-location API as a result.