Even so, Tasso Roumeliotis, CEO and founder of LBS company WaveMarket, said that anticipated privacy concerns are one of the main inhibitors in the LBS space today. WaveMarket's Family Locator platform, deployed by Alltel and Sprint in the U.S., is built on a layer of privacy provisions, including that customers are informed and repeatedly reminded of the tracking being done. Roumeliotis believes that the benefits of receiving targeted ads will outweigh the forfeit of privacy in a customer's mind.

“The bigger issue becomes more about having location become more ubiquitous,” Roumeliotis said. “Right now, of the total handsets in the U.S., probably only 20% to 25% of them have location that is being actively used. There isn't a company that is out there across all the carriers that actually have bought a location and are able to sell it back to advertisers.”

Mobile presence company Loopt is hoping to change that. It launched what it claims is the first location-based advertising platform in the U.S. earlier this month. In partnership with CBS Mobile, advertisers can use a phone's GPS and localization technology to target a customer based on his or her physical location. These location-based ads appear on mobile Web sites, but according to the company, location history is not stored.

To subscribe to Loopt's social mapping application, consumers must accept “terms of agreement” that allow Loopt to collect, maintain and display a user's location data to other Loopt friends, the carrier and third-party partners, which includes advertisers. The agreement also states that users then might receive promotional text messages and advertisements on their mobile handsets. As the fine print makes clear, it is a purely opt-in process.
Simeon Coney, vice president of business development for mobile security provider AdaptiveMobile, said the danger in sending promotional texts and ads lies in operators abusing this privilege. While a PC's e-mail system typically has the ability to filter out any inappropriate spam, text messages don't yet have this capability.

“When you have a text message, you open it instantly and read it,” Coney said. “You don't think twice about whether you want to receive it. Particularly in some countries where mobile operators charged into doing mobile advertising, they've actually ended up spamming their users, and as a result of that, users feel their privacy is being impeached upon — not so much that information is being distributed, but actual interruption has occurred to their working or personal lives, over and above a level they feel comfortable with.”
A prime example of this comes from social networking site Facebook. The online giant lost a lot of its members' trust when it launched Beacon, which informs Facebook of members' purchases and activity on other sites. The almost instantaneous backlash came about as users realized their privacy was being invaded to target ads at them and their friends.

As far as mobility is concerned, privacy isn't a dead issue. Examples such as Facebook show that it is still at the forefront of many consumers' minds. The potential to trade a service for a customer's trust is what provides the stumbling block for a host of customized applications. As the tug-of-war continues between customers wanting to maintain their right to privacy and carriers wanting to capitalize on knowing where those same customers are, proliferating LBS may take users further into a monitored environment. But, if all goes as planned, no one will really mind.