Facebook Inc (NASDAQ:FB) has just refreshed a feature called “Nearby” for iOS and Android. The update makes it a lot easier for users to search for local places, including places of business. It also allows a user to rate or recommend a local place. 250 million people tag their locations each month on Facebook.

facebook nearby

“This is an early release and there’s lots more to do. Results will get better the more people use Nearby, and we’ll continue to improve it based on feedback. We also plan to add places info from third party services in the near future”, said Facebook.

Facebook Nearby feature can be accessed on the ‘Nearby tab’ on Facebook’s smartphone apps. Instead of getting a simple list of places, users will see a list of nearby businesses that Facebook thinks they will be interested in.

According to Sterne Agee’s analysts, this feature could have positive long-term implications for Facebook Inc (NASDAQ:FB), including increasing engagement and monetization on mobile.

1. “Nearby” should incentivize local merchants to update their pages on Facebook, which should help increase engagement.

2. More important, it will allow Facebook to get a larger share of local advertising, competing with companies like Yelp Inc (NYSE:YELP).

3. Over time, it will allow Facebook Inc (NASDAQ:FB) to get a larger share of local eCommerce, competing (or partnering) with companies like Groupon Inc (NASDAQ:GRPN).

Sterne Agee has a ‘buy’ rating on Facebook stock, with a Price Target of $32.