The world’s largest social networking service Facebook is reportedly buying Austin-based Gowalla, a location-based social networking site, according to a source close to Gowalla cited by CNN.

Neither Facebook nor Gowalla have confirmed this news directly at this point.

Gowalla is a primarily mobile web application that allows users to check in to locations that they visit using their mobile device. Citing sources, CNN said the Austin, Texas based Gowalla will help Facebook in developing new Timeline feature. Reports said a major team from Gowalla would move to Facebook headquarters in Palo Alto, California. And most of Gowalla’s 30-odd employees will work on Facebook’s ambitious new Timeline redesign.

“It’s a perfect match,” CNN quoted the source as saying. “As far as the big picture, Gowalla’s vision is about people telling stories, and Facebook’s vision for Timeline is about stories about important moments in life.”

Texas-based Gowalla was a competitor to check-in App Company Foursquare but never took off and eventually revamped, recasting itself as a travel-oriented guide app. Gowalla had an emphasis on design with intricately designed interfaces and badges. But Foursquare had many more users.

Gowalla had about 2 million users in September, compared with Foursquare’s 10 million.