Facebook’s move into location has seemed inevitable for some time, and it now appears that the company will officially reveal its plans at next month’s Facebook developer conference.

According to The New York Times, the social network will incorporate location in two ways: (1) its own features for sharing location and (2) APIs to let other apps — like Foursquare and Gowalla –- offer location services to Facebook users.

Presumably, Facebook will make sure to address privacy issues with its location features — for example, perhaps with settings that allow you to share your location only with a select group of friends. The Times’ report doesn’t detail the specifics of such features, though it notes that the social network updated its privacy policy late last year in preparation for a location launch.

Facebook will be rolling out its location features to an enormous user base — there are now more than 400 million users of the social network in total, 100 million of which access the site via mobile regularly. The company also has its own native apps for all of the major mobile platforms. All of this gives Facebook’s location features an enormous edge over the competition.

The Times’ report suggests that the competition isn’t the likes of Foursquare and Gowalla, however, but rather Google and its huge base of local small business advertisers. Of course, the startups aren’t ignoring this opportunity either — earlier today, Foursquare shared details of upcoming features it plans to release tohelp local businesses utilize checkin data.

With Facebook entering the space, though, the other players will need to look to create value in ways beyond checkins and knowing where your friends are located at any given point in time. That’s why Foursquare seems to be so focused on partnerships and gaming, while Gowalla is making moves (as recently as last night) in virtual goods.

In any event, location remains the huge trend so far in 2010, and literally each day seems to bring new indications of which way it will all play out.