Intel is investing in Wi-Fi positioning system provider Skyhook wireless, joining the fledgling company's first $6.5 million funding round. Added to the $1.8 million seed funding the company received in 2003, the small niche services provider has racked up $8.3 million.

"Intel has played a pivotal role in the explosive growth of Wi-Fi, enabling new applications for service providers, enterprises and consumers," Intel Capital Vice President Scott Darling said in a statement. "We have explored next-generation location takes for several years and our investment in Skyhook Wireless is an extension of that focus."

Skyhook has developed a positioning system using the broadcasted media access controller (MAC) addresses of every Wi-Fi access point it can find. Instead of relying on cellular triangulation or GPS, Skyhook has created a nationwide map of Wi-Fi access points, gateways and hot spots, which it compiles into a database on top of which location-based services can be built. Every access point emits a unique MAC signature, which can be read by any Wi-Fi device regardless of whether it has permission to access the network. By pinpointing these locations on a map, Skyhook uses two or more Wi-Fi access points and the relative strength of their signals to extrapolate a devices location within 20-40 meters.

The management system is even self-healing. If someone moves an access point or shuts it off, the network can detect the change by comparing it to the signals of other nearby transceivers, updating the database on the fly. Skyhook has mapped out the Wi-Fi footprints of 70 cities in the U.S. so far.

Though the companies did not say how much Intel contributed in the Series B investment, it was less than Bain Capital Ventures, which Skyhook said led the round. Nokia's investment arm Innovent and venture finance firm CommonAngels, both of which provided Skyhook's seed capital, also participated in the round.