Facebook has just announced a huge revamp of their Nearby feature inside the mobile app that turns it from a not-too-remarkable tracker of friends’ check-ins to an actual attempt at a personalized local recommendation engine.

Now when you open up Nearby, you’ll see a search bar, a history list, and a bunch of new location categories – restaurants, nightlife, arts, hotels, shopping, etc. Each category has its own subcategories, like Mexican food inside restaurants or movie theaters inside the arts category.

Facebook is not just listings locations arbitrarily, or based on their global popularity. With Nearby, Facebook is using true social recommendations to find the best places for you based on your friends’ interactions. Let’s say your good friend Jimmy just gave an Indian restaurant a few miles away from you a great rating when he checked-in last night. Well, there’s a good chance that Facebook’s NEarby algorithm would put that location front and center for you.

“When someone looks for a place, the results that appear in their Nearby list are based on things like their friends’ recommendations, ratings, check-ins, and likes,” says Facebook.

Once you choose a location, you’ll be presented with Facebook’s redesigned location pages which include friends who’ve been there, hours, a map, star ratings, and reviews.

After you’ve experienced the location, Facebook wants you to share that experience with your friends through rating and reviewing. In theory, the more people that participate in this way, the better the recommendations will become.

Facebook encourages businesses to update their pages to include any and all information, including their category so they can be easily found through Facebook’s new Nearby product. Also, now more than ever, businesses need to make sure users are liking, checking into, rating, and sharing their Facebook page so that Facebook knows to recommend them when people are looking for things to do on the go.

So, Facebook has finally gotten into the local search game in a real and meaningful way. Facebook says that 150 million people visit Pages on a daily basis – so they have a rather impressive amount of like, check-in, and rating data to pull from. This, in theory, could make Facebook Nearby incredibly useful. They say that this is an early build, and “there’s a lot more to do.” But Facebook’s foray into truly personalized location recommendations should make the folks over at Foursquare and Yelp pay attention. Facebook says that the Nearby update should be available later today on iOS and Android.