The news broke late last week: geolocation-based mobile app Gowalla, one of Austin’s most creative tech start-ups, has been acquired by Facebook.

Gowalla has many memories from its time in Austin; the app, which awards badges for virtual “check-ins,” carried out a heated but outwardly good-natured rivalry with app Foursquare after both launched on the same day, March 13, 2009, during SXSW. The next year, at SXSW 2010, both benefited from the “fued” by staging “The Geosocial Showdown,” an honest-to-God boxing match between Foursquare founders Dennis Crowley and Naveen Selvadurai, and Gowalla’s Josh Williams (a Dallas native). And for the past few years, Gowalla has been very active in Austin’s small business scene, sponsoring events and aligning themselves with innovative organizations.

Facebook opened an office in Austin earlier this year, and they’ve already doubled their office space here in town, opening a second office at 300 West Sixth Street. They’re still hiring locally, which is great news for the city’s scores of savvy developers.

The Gowalla team, however, won’t be sharing that space. Last week, CNN reported: “Most of Gowalla's employees, including founder Josh Williams, will move to Facebook's offices in Palo Alto.”

Why not just fold the new acquisition into the existing (and flourishing) local offices? Mainly, because Facebook isn’t just adding Gowalla to their roster of app offerings; they’re working with the team on the new Timeline feature, a complete overhaul of the profile and feed architecture that launched earlier this year and will be available to all users over the next few months.

Timeline completely changes the way we interact with and view Facebook. Instead of displaying a single stream of updates on your personal page, Timeline organizes all your activities into a more easily navigable, well, timeline that lets friends and potential stalkers view your photos, statuses, social connections and more by month and year. The page is generally sleeker, and you can also add your own custom banner image.

Many of the changes Timeline brings to your Facebook page are architecture-related; that is, changing the way your page is structured. While Gowalla is a well-designed app, it’s unlikely Facebook spent so much money on such a specialized team just for design feedback. What are they planning with Gowalla?

In a 2010 article for Wired UK, writer Neal Pollack profiled the Gowalla / Foursquare explosion, noting: “For a decade or more, the concept of ‘life as a game’ has been bandied about nerd theorist circles, but now it is coming to fruition. All over the web, reward-based achievement games have begun to blossom as a means of encouraging specific behavior.”

This is certainly in line with Facebook’s goal of creating an interactive space that influences and enhances our social lives, instead of just documenting it. From the introduction of the “Like” button to their own contentious take on geolocation integration, the social network is trying to encourage more two-way dialogue.

Today on CNN, Pete Cashmore, CEO of tech blog Mashable, speculates on the impending merger. He notes that Facebook now owns all the personal data you’ve kept on Gowalla, an important point for those worried about privacy. But most importantly, he points out that, while it seems natural that Facebook is hoping to strengthen their geolocation integration (after the marked failure of their Places feature earlier this year), Gowalla’s reach and abilities extend beyond just check-ins.

“[D]on't expect Facebook to suddenly launch a wave of new location-based features. I think the fusion of the companies will be less visible than that,” concludes Cashmore.

Facebook has yet to release an official comment, and Gowalla employees are still working out exactly what this means for the Austin team.

This morning, (former) CEO Josh Williams posted to the company’s blog:

“The Gowalla Passport has become a record of all the places we’ve visited, the people we were with, the photos we took, and the stories we told. Many of you even use Gowalla like a scrapbook of sorts — a place to keep all those memories,” Williams says. “About two months ago, my co-founder Scott and I attended F8. We were blown away by Facebook’s new developments. A few weeks later Facebook called, and it became clear that the way for our team to have the biggest impact was to work together.”

While we’ll miss their energetic presence here in Austin, we look forward to seeing what the creative and passionate Gowalla team brings to Facebook.