Thanks to smart phones and other mobile devices, the number of applications that make use of geolocation data is exploding. But developers and device makers face new challenges that include determining physical location accurately, turning coordinates into meaningful information, and protecting users' privacy.

Last week, Twitter announced that it would supply developers with richer geolocation data. For users who activate the feature, Twitter already provides the latitude and longitude information through its application programming interface (API). The new data will add meaning to those coordinates: the relevant country and city, as well as the identity of a neighborhood or nearby landmarks and businesses. This is a direct result of Twitter's acquisition of geolocation startup GeoAPI in December 2009.

A growing number of sites and apps offer similar services, including Google Latitude's app for Android-powered smart phones; the popular social networks Gowalla, based in Austin, TX; and Foursquare, based in New York City. The next version of HTML even has location-based hooks baked into its specification, allowing browsers and sites to share information about a user's location.

Facebook, the world's biggest social network, with 400 million users, hasn't yet said when it might roll out location-based features, but Elad Gil, a cofounder of GeoAPI, believes it's only a matter of time before location data is ubiquitous across the Web. "Location is where social media was eight years ago," says Gil. "Now social media is integrated into every website--geo will be the same."

There are several challenges that need to be solved, however. First, Gil says, devices must know exactly where they are, which means harnessing more than just satellite positioning information.

"GPS is designed for military purposes--it's not for consumers going from home to work or walking through malls," says Ted Morgan, founder and CEO of Skyhook Wireless, a company based in Boston that provides the geolocation software used on more than 80 million devices worldwide, including the iPhone. Skyhook's solution is to triangulate a user's location using three sources of spatial information: GPS, cell phone towers, and most innovatively, any nearby Wi-Fi hot spots.

Skyhook maps the locations of wireless networks by driving around with a Wi-Fi antenna and software that automatically records network IDs and signal strength (a practice known as war-driving). Seven years ago, Skyhook was "war-driving and geolocating, and everyone thought they were nuts," says Joe Stump, former lead architect of Digg and cofounder of the Boulder, CO-based SimpleGeo. "Turns out they were pretty smart."

Skyhook remaps Wi-Fi hot spots approximately once every two years, but its engineers figured out how to update their database of hot spots even more often--every time a user accesses an application that uses geolocation data on a device equipped with Skyhook's software. That means every user of any location-aware iPhone app is helping to maintain Skyhook's database of Wi-Fi hot spots. "We call it a self-healing network," says Morgan. "Every time you're using it, you're getting the benefit of the data as well as helping to tune the system."