However, there are some serious concerns about the privacy of users.
The reportAccording to a report on Bloomberg, once the location app is activated it will continually track the location of the user. Your friends will therefore be able to search for you in the real world and get in contact.
It's a development of the location services on Facebook already, which uses GPS to pinpoint where you are, so you can 'check in' and tell your Facebook friends where you are. The idea will be that your friends will be able to find you even when you haven't checked in.
Facebook could then make money from the development by targeting you with adverts that are relevant to your location.
It's worth highlighting that this has not been confirmed by Facebook. It comes from a trade report citing two anonymous sources.
So should we be worried?On the one hand this is far from the only popular app with this sort of functionality. Findmyfriends already lets you add friends to an app and then pinpoint them at any time of the day or night.
The Transfer Knowledge Network estimates that in the UK location services are worth £6.7 billion, so we are generating a lot of money from being free with this information.
WorriesHowever, this doesn't necessarily mean we ought to be quite so comfortable with sharing information. If this is broadcast to all your friends on Facebook, that's a lot of people. Users have spread the net far and wide: friends can include people you have known for years but also new acquaintances and people you bumped into once at a party. Do you really want those people to know where you are at all times?
Secondly, Facebook is linked to an awful lot of other information. If someone has seen a photo of you in expensive jewellery, or next to a pricey TV, they know where you live and where you are, so they have a perfect opportunity to help themselves to your property whenever they want.
If you want to scare yourself, try visiting weknowyourhouse.com. This uses Twitter to find people. It searches for when people use the word 'home' in tweets, picks up the associated geolocation, and then posts it to the site. It shows you where they live (including Google Street View). It also tells you about the places nearby where they've used FourSquare. The site says it only keeps this information for an hour, but it's alarming how easy this data is to access.
Know your risks
The experts agree that everyone feels differently about privacy - and takes a different approach when it comes to different apps. The issue is whether they know just how much information is being released about themselves and just what risks they are exposing themselves to by accepting location services.
Jonathan Bamford, from the Information Commissioner's Office, has warned that the pace of change in location based services is creating a lack of awareness as to how mobile devices operate, and as a result end users are losing the ability to control the data transmitted.
If you're going to use these services, you need to know what information you are giving away - and who you are giving it to.
If you are worried, all these apps will allow you to turn off location services. The Open University has actually developed a Privacy Shake, which lets you alter your privacy settings just by shaking your phone.
But what do you think? Are you concerned, or are location services a useful tool? Let us know in the comments.