Location-based network Foursquare revealed this week that it is expanding from its New York City headquarters by adding a full team of San Francisco-based engineers.

In just one year, Foursquare has grown from just five employees (pictured below) to 35, but the team still “can’t expand as quickly as [they] want.” Moving to the Bay Area, the company will have a much larger pool of potential applicants to choose from (just try holding onto them).

Writes the Foursquare engineering team:

“So, if you love Mission-style burritos, temperate climates, and want to work on some of the most exciting data and engineering problems in the world, contact us.”

The company's San Francisco team will share space with Square, the payment solution company founded by Twitter creator Jack Dorsey.

While the company team has grown sevenfold, the location-based service has seen its audience balloon by a factor of 45, from 100,000 a year ago to 4.5 million users today. Before, the Foursquare app was only accessible on iPhone, but today users can enjoy it on BlackBerry, Android, Palm, and Ovi by Nokia. And thousands of developers now increasingly build upon the Foursquare API just as developers do on Twitter.

Here comes everybody

The news comes in the same week that Yelp announced the addition of Check-In Offers, a feature that Foursquare has offered for awhile. Even Facebook, probably the biggest company late to the location game, already has check-in deals.

The way it works (on Foursquare and most other location services) is that users who regularly check in to an establishment have the chance to unlock special deals and promotions solely for patronizing the same place often. The best customers (the ones who return and check in the most often) earn the title of Mayor and are treated to the very best deals.

Over the past year, we’ve seen social and mobile grow by leaps and bounds, as best evidenced by the meteoric rise of social gaming specifically, and the unbelievable profit margins for a market based mostly on the sale of virtual goods. While Foursquare had a huge growth spurt in 2010, next year will undoubtedly be a pivotal point for location services. With Facebook, Google, Yelp and others now in the mix, 2011 could finaly be the time location goes mainstream.

Every side has its advantages.

Foursquare has the advantage of being one of the first; it's headed by Dennis Crowley, who has been doing location for a better part of the past decade. On the other hand, Facebook has the social graph, which means more users might be inclined to check in to places if they see their friends doing so. Yelp boasts one of the most comprehensive databases of restaurant and other establishment reviews, meaning people already go there to look up locations. Google has the bank account and might have to just resort to snapping up more talent from the swarm of location startups out there (it already purchased Crowley’s former location venture, Dodgeball, which became Google Latitude).

Either way, location is an increasingly interesting space to watch.