San Francisco, Oct 21 (IANS): Facebook is testing a feature called Neighborhoods that connects people and businesses in a locality in a similar way that community-focused social network Nextdoor does.

The new Facebook feature which is currently in limited testing phase allows users to display local posts, groups and marketplace items, CNET reported on Tuesday, citing a Facebook spokesperson who confirmed information earlier tweeted by social media consultant Matt Navarra.

"More than ever, people are using Facebook to participate in their local communities," the Facebook spokesperson was quoted as saying.

"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."

The Facebook Neighborhoods feature allows users to select a locality, permit the social network to use their location to display posts, marketplace items from others in the neighbourhood, according to Navara.

If the feature rolls out widely, San Francisco-based Nextdoor may have to deal with some serious competition.

Founded in 2011, the privately-held Nextdoor is backed by prominent investors including Benchmark, Shasta Ventures, Greylock Partners, Kleiner Perkins, Riverwood Capital, Bond, Axel Springer, Comcast Ventures and others.

Its stated mission is to connect neighbours to each other -- and to everything nearby -- local businesses, services, news updates, recommendations and stuff for sale from the people down the block.