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Update: Soon after this posted, Gowalla announced it is, indeed, being bought by Facebook in a blog post by chief executive Josh Williams. You can find the announcement here.

Location-based social network Gowalla‘s chief executive Josh Williams may not have given the official word that the company is being bought by Facebook, but a letter to his employees doesn’t exactly convey a red light.

Last week, an unnamed source leaked information about the deal to CNN, saying Gowalla projects are to be absorbed by Facebook and refocused on the social network’s new Timeline feature, a chronological life-view of your Facebook activity. Employees of Gowalla will also be moving from their home of Austin, Texas to Facebook’s headquarters in Palo Alto, Calif., with few remaining to work in Facebook’s remote Austin office.

At the time, the two companies declined comment. But it’s hard to stay quiet when articles, tweets and general Internet buzzing starts to happen. Williams eventually had to say something to his employees. A note that was intercepted and read to All Things D states:

Subject: Rumors and speculation

CNN just broke the news that Gowalla has been acquired by Facebook. This story was leaked from an unknown source.

The ink on the deal is not dry, so our holding pattern is that we do not comment on rumors and speculation. I have another email penned that was ready to send you today, assuming you would get this news before the story was officially released.

But now it is all over Twitter, so you have likely heard. A longer email will be sent soon. Until then, I am so very grateful for what you have done to make Gowalla a success.

Given the reference to CNN’s article, the note was probably sent on Friday.

As VentureBeat lead writer Dean Takahashi points out, Facebook has often made acquisitions not necessarily for the product, but for the engineers. After Gowalla lost the location land grab to FourSquare, it turned into a travel advice site and has since been looking for the right home.

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