Search engine titan Google (Nasdaq: GOOG) has begun installation of its much-heralded free wireless LAN network in the company's home base of Mountain View, Calif.

"They started putting radios in about a week and a half ago," a source tells Unstrung.

Google wouldn't comment directly on its rollout schedule in Mountain View, but a spokeswoman says that it received approval for its free WiFi plan from the city council last month, wants to start installing equipment as soon as possible, and is intending to complete the deployment by June 2006.

On the face of it, the network is a fairly straightforward -- albeit large -- metro-mesh deployment. Google and its partners will install hundreds of 802.11 radios around the 12 square miles of the Northern California town and offer free WiFi connections -- rate-limited to 300 kbit/s -- to its 72,000 residents.

But that deployment is only a start. Mountain View will actually be a proving ground for the new technologies and approaches that Google is bringing to the public access WiFi market -- a showcase that could help it win larger prizes like the deal to roll out a similar network in San Francisco.

The location-aware ad delivery system that Google is expected to run on this network is already the subject of much discussion. This software, which "knows" where a user is at any given time, will allow businesses to target ads with a greater degree of geographical accuracy then ever before. (See Google's Ad-Mad Network .)

For instance, someone searching for "sushi" while surfing on the Mountain View WLAN network could see ads returned from a raw fish joint just a couple of blocks away.

This means that Google can keep its ad rates up even when competing in what is typically perceived as the low-margin WiFi hotspot market. It is in Google's interest to innovate on ads, since almost all of Google's $3.2 billion in revenue last year derived from sales of its search-based ad sales, according to analysts. Targeting ads to the user's location adds another dimension to that model.

And just because the firm is only offering a rate-limited service for now doesn't mean that it couldn't offer a premium higher-speed access service in the future. Unstrung has been told that the firm is looking at a number of premium options.

The next big step for Google is San Francisco, which currently has an RFP out for its own citywide 802.11 access network. Google is working with partners like integrator Wireless Facilities Inc. (WFI) (Nasdaq: WFII) and mesh hardware provider Tropos Networks on these projects.

The firm has also been linked with startup Feeva Inc., which has developed technology "to identify, target, and deliver relevant and useful information to the user, in collaboration with online media, content, advertising, and search services," over wireless broadband links, such as WiFi hotspots. (See Google's Free-Time Secure WiFi.)But Feeva is trying to stay in something like stealth mode and has largely stopped talking publicly about its links with Google. So all that can be said for sure right now is that Google has purchased the Union Square, San Francisco, hotspot that Feeva used to run.

— Dan Jones, Site Editor, Unstrung