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Once we've got a standard storage for geographic coordinates, we need to expose that in an API search so it can be used in a definitive way by handheld apps and other goodies.

Is this information even stored in the database? If it's not, this can't be done efficiently.

Isn't this now done with the extension Max has written?

Should be, though it's still in progress as I understand.

Seems to work now, for example:
https://en.wikipedia.org/w/api.php?action=query&list=geosearch&gsradius=10000&gscoord=37.786971|-122.399677