It's based in Burbank, home of Insomniac's current operations. But it's a new team, made up of people newly hired for social games, so it shouldn't take resources away from games about shooting aliens or making prurient jokes about weapons.
In a blog post about the new division, Brian Hastings said that "Insomniac Click is dedicated to taking the qualities that define our brand – deep worlds, rich stories, accessible gameplay – and applying them to new game experiences that anyone in the world can play." Insomniac hasn't said exactly what its first social game will be, but you can read a lengthy manifesto about game design and social games (and why they aren't really great yet!) here.