Google on Wednesday introduced Latitude, a friend-finder application that it hopes will jumpstart the location-based services market.

The application, which operates as an add-on feature of Google Maps, allows friends or associates to share their whereabouts through location coordinates gleaned from cell towers to which their mobile phones are connected.

Friend finder applications have been around for about four years and despite early enthusiasm the technology has languished in the U.S. because of network incompatibilities and consumer concerns about privacy. (Will Location-Based Service Find Itself?)

The sluggishness of the market has also tested the financial stamina of the startups that dominate the market and the commitment of their investors, particularly in the throes of a global recession.

But key players are putting their marketing weight behind location based services (LBS).

Cell phone giant Nokia has made LBS the centerpiece of its push into mobile applications. The Espoo, Finland, based company completed its $8.1 billion acquisition of mapping firm Navteq last year and also acquired LBS provider Plazes. (Nokia to Acquire Plazes for Location Services)

In December, Vodafone, the world’s largest mobile carrier, acquired Swedish LBS applications developer Wayfinder for $30 million. (Vodafone Nabs Wayfinder for $30M)

“If carriers can integrate LBS, social networking, advertising, and M-commerce capabilities into their platforms, they can provide a variety of applications and services to consumers, advertisers and merchants,” said Shahid Khan, senior partner with IBB Consulting.

The participation of larger, influential players such as Vodafone, Nokia, and Google gives LBS the means of overcoming two of its major hurdles – incompatible mobile networks and handsets.

Frequently friends interested in a location service would have to be on the same mobile network or they would be limited to certain phones. So developers are stuck with the expense of writing applications for multiple networks and multiple phones, and customers are unwilling to pay a lot for the application.

Google’s Latitude, offered in 27 countries, is available on Android devices such as the T-Mobile’s G1 along with some BlackBerry devices, most Nokia smartphones and most Windows Mobile devices with version 5.0 or over. 

Users can check each other’s whereabouts, both from their mobile phones or from a PC.

On the privacy front, users can opt in or opt out of Google Latitude at any time.