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The location sensors in Windows 7 enable your operating system and other software to adapt to your current geographical location. Of course, your computer must have a location sensor supporting hardware e.g., a GPS device, wireless WAN radios or other cellular triangulation technologies. Using these location sensors, your applications can know exactly where you are and provide you with relevant information and content. For example, some twitter clients in Windows can use the location sensors and can automatically post your geographical location along with your tweets.
Most of the modern laptops and desktops are coming with some sort of GPS device installed inside them to take advantage of this location sensor feature in Windows. But even if your computer does not have such a location sensor hardware device, you can install a software emulation of such devices. Geosense for Windows is such a software based location sensor for Windows 7 which uses Google Location API to find your present location.