Facebook Building Neighborhood Feature as Nextdoor Eyes IPO

(Bloomberg) -- Facebook Inc. is building a feature for users of its social network to connect with their neighbors, a push toward more intimate interactions that treads on the idea behind rival Nextdoor Inc., which is considering a public offering.

Screenshots of Facebook’s new feature, which is currently being tested, were shared on Twitter Tuesday by Matt Navarra, a social media consultant. The images show a product called Neighborhoods, where users can enter their address and complete a unique “neighbourhood profile.” A Facebook spokeswoman confirmed the company is testing the feature in one market: Calgary. The screen grabs show the software using the Canadian English spelling of its name.

Other images show Facebook reminding users that its “community standards” still apply inside the Neighborhoods feature and the company encourages people to “Keep It Clean” and “Be Inclusive.”

“More than ever, people are using Facebook to participate in their local communities,” the spokeswoman said in a statement. “To help make it easier to do this, we are rolling out a limited test of Neighborhoods, a dedicated space within Facebook for people to connect with their neighbors.”

Facebook had been pushing people toward more intimate interactions within the app in recent years, including private groups and messaging, as a way to increase usage of its services. It has also started to encourage users to create separate profiles within their larger Facebook profile for specific cases, like dating and college connections.

An early version of the product was first spotted and shared on Twitter by Jane Manchun Wong back in May.

The Neighborhoods feature is notable given the popularity of Nextdoor, a neighborhood-based social network founded in 2008 that has raised about $470 million in funding. Nextdoor is considering different options for going public, including a direct listing, Bloomberg News reported last week. The San Francisco-based company says it serves more than 268,000 neighborhoods globally, including about a quarter of U.S. neighborhoods, on the service. Each neighborhood works as its own mini-social network, and people use it to do everything from selling used goods to posting about crime or neighborhood events.

When Facebook enters a new market, it can have an immediate impact on competitors already in the space. When the Menlo Park, California-based company launched its dating product in the U.S., for example, Match Group Inc. stock fell as much as 7%.

Facebook also has a history of mimicking rival products, and has been accused of copying many over the years, including the popular Stories feature created by Snapchat. Facebook is currently under investigation from a number of government regulators, including the U.S. Federal Trade Commission and the Justice Department, for alleged anti-competitive behavior. The screenshots posted to suggest Facebook’s Neighborhoods product will work in a similar way to Nextdoor.

(Updates with background on first revelation of the feature in sixth paragraph)

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