There is lots of talk this week about the next generation browser, now that Firefox 3 has launched. On Friday I got the chance to meet with Ryan Sarver, Skyhook Wireless director of consumer products, who has some notable efforts in progress to bring the company’s Wi-Fi positioning technology to the browser.

Currently Skyhook has the Loki toolbar, which pinpoints a user’s location for lots of different applications including local search. But that requires an active tool bar download, which is a tough proposition and only really applies to a limited set of power users and early adopters. Even with early adopters, you’re confined to finite tool bar real estate.

“If you have the choice to download our tool bar or Google’s tool bar, which do you think is going to get more downloads?” poses Sarver, referring only to the wider appeal and brand recognition of Google.

A location aware browser would conversely act in a more passive way and sit in the background to do its thing. This would open up lots of possibilities for ad targeting based on location. Rich media ads could serve up location specific promotions when prompted or interacted with. This would be a boon for the undercapitalized area of national advertisers targeting locally.

Currently the state of the art is IP targeting that ad networks sell based on advertisers’ need to reach certain demographics. But the technology is there to get much more granular (see Placecast). Sarver claims that it’s hard to get these products off the ground in terms of advertiser interest, and there is definitely a lag between the technology and Madison Avenue’s ability to understand it.

“It’s almost like you have to keep the value proposition to yourself and just keep it simple and take care of the complex part yourself,” he says. “Let the technology prove itself out.”

Though it’s not in the browser yet, Skyhook is tackling the online world, one company at a time. It’s bringing location awareness to forward thinking local product search companies like Krillion. This will happen through plug-ins that let users search for products near them, which includes Krillion’s deep repository of inventory data.

The holy grail is to get users to opt in for product alerts — something that, like online coupons, makes a lot of sense in theory but hasn’t gotten off the ground. NearbyNow has built a solid product around this idea. Mobile could bridge the online/offline gap with alerts and coupons. Any products along these lines so far have been early adopter tools, but could finally reach the mainstream on the backs of the appeal, rising standards and lower price of the iPhone.

Meanwhile, Sarver is excited about location awareness (and consumer awareness of it) on the iPhone. The iPhone’s GPS capability has gotten all the attention, but the Wi-Fi positioning stepping in when it’s needed (see past post) could be a great utility.

As GPS and lower priced iPhones slowly push mobile search into the mainstream consciousness, apps will fuel the demand. The app store will serve as the consumer venue and could be analogous to what iTunes did for online music. As this happens Wi-Fi positioning will be the unsung hero for location awareness.

But it doesn’t matter, says Sarver, because Skyhook isn’t a consumer brand. It’s happy to work in the background and enable the cool mobile local apps developers will bring us: “The people that need to know about it will,” he says.