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Facebook Closing In On Acquiring Check-In Service Hot Potato

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We’re hearing from sources close to the deal that Facebook is in late stage negotiations to buy Hot Potato, the social activity service. The deal is not yet finalized from what we’re hearing, but could be at any moment.

Terms of the deal are likely still be negotiated, but it’s believed that this would largely be a talent acquisition for Facebook. Yes, another one.

Hot Potato raised a small $1.42 million Series A round late last year, so it should not be too expensive for Facebook to buy such a company. It would undoubtedly be much less than the supposed $50 million in cash and stock they paid for FriendFeed last year, for example. Hot Potato’s About page currently lists 8 employees.

Hot Potato actually launched at our Realtime CrunchUp event last November. Since then, they’ve slightly pivoted away from check-ins based around events, and more towards check-ins based on anything you may be doing.

While the service hadn’t yet exploded in usage, the team behind it impressed us with the way they built their application – particularly their mobile app for the iPhone.

As I alluded to above, Facebook has been on the prowl for talent acquisition targets recently. In particular they’re supposedly looking to bulk up the projects under Facebook Director of Product Blake Ross, and on the mobile side of things, we’ve heard. This Hot Potato deal could fulfill either of those — or both.

If the deal is completed, it would be the seventh known company that Facebook has acquired — with five of those deals taking place in the last six months (and a sixth, FriendFeed, happening just about a year ago).

Earlier this year, Facebook is believed to have sniffed around both Loopt and Foursquare as potential acquisition targets. Hot Potato is often clumped in with those two as a location-based service. But, as I said, the latest revamp moved the service away from location check-ins (though location is still a central part), and more toward general check-ins — a space which is currently heating up quite a bit. (Still, I’ll chalk this up to up to the Great Location Land Rush of 2010, if it goes down.)

But again, this would seem to be a pure talent buy. If the deal is finalized, you can probably expect Hot Potato, the service, to be shut down at some point in the future.

Update: Here’s Facebook’s official statement on the matter: “We don’t comment on market rumor and speculation.

Update 2: MediaMemo is reporting that the supposed price will be between $10 million to $15 million. We’ve been hearing a similar range as well, though closer to the lower side of that.

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