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According to Yahoo,

Facebook knows a lot about you—including where you’re posting from. Now the social network wants to share that location information with other users. Facebook announced late last week that a feature will be added called “Nearby Friends.” It will allow a user to see their approximate distance from anyone within their network, and allow the user to share their location with other people for a limited amount of time. The good news is that the feature is opt-in, meaning it will be enabled only for those who want to use it. (Yahoo)

Well, at least we have the option of choosing if we want this feature enabled.