(FORTUNE Small Business) – When Squaw Valley, Calif., won its long-shot bid to host the 1960 Winter Olympics, it ushered in a new level of technological sophistication. Not only were those the first Olympic Games to be televised live in the U.S., but they were also the first to use a computer to tabulate results. Family-owned Squaw Valley Ski Corp., which generates about $35 million in annual revenues, still prides itself on keeping the ski area as modern as possible, so when a local Internet provider proposed to turn the mountain into a giant wireless Internet hot spot, resort president Nancy Wendt, 59, was ready to listen.

On its face, the wireless deal promised little in the way of immediate profits, and Squaw is still very much in the process of rolling out its wireless network, its services, and its marketing plan (we'll check back to see if it's been successful). But Squaw's embrace of wireless is in tune with the zeitgeist. "Hospitality companies are now looking at offering hot-spot service as a cost of doing business and being competitive," says Stan Schatt, research director for analyst company Giga Information Group, based in Cambridge, Mass. Indeed, Wendt and her husband, Squaw Valley founder and chairman Alex Cushing, 90, see wireless as a fresh way to advance their business's tech-forward image, a particularly valuable asset for a resort that's just a four-hour drive from Silicon Valley and that draws about three-fourths of its guests from the Bay Area. "Even when dot-commers were getting laid off," Wendt says, "they came out here to go skiing."

Financially, adding wireless Internet access was a no-brainer, says Wendt. Exwire, an Internet provider based in nearby Truckee, Calif., offered to provide and install all the hardware and an additional T1 line to carry the data. Squaw Valley had to pay about $3,000 to ensure that it had power lines in the right spots; once it brings fiber-optic cable to High Camp (an 8,200-foot-elevation activity center with a new pool and spa opening in late March), the total expense will be closer to $10,000. Exwire handles all the billing for the wireless-access services, which cost users from $2.50 an hour to $29 a month, and Squaw receives 10% of the revenue, which could ultimately net it about $2,000 a month if some 30 skiers a day sign up, according to Exwire CEO Devin Koch. Such volume would pay for the resort's investment in power lines within a few months. And this arrangement saves Squaw's management from the hardware, installation, billing, and maintenance headaches that small businesses can incur when creating their own hot spots. It also offers more potential upside than going with Boingo Wireless, where revenue trickles in at a rate of $1 per customer use. Squaw signed a seven-year deal, in which Exwire benefits by getting tower locations on the mountain that will let it provide high-speed access to homes and businesses in Olympic Valley, Calif., nearby. (Exwire doesn't share those revenues with Squaw.)

Squaw execs such as controller Ron Welton say they didn't go wireless as a cash-generating operation; rather, their hope is to get visitors to turn weekend trips into long weekends, with Squaw picking up additional revenue from lift-ticket fees and food and beverages. Having wireless "makes it easier for me to go to Squaw on a Friday instead of waiting until Saturday," says Rob Coneybeer, a venture capitalist with New Enterprise Associates in San Francisco. Squaw also hopes the service will differentiate the resort further from nearby Heavenly (which was acquired by ski giant Vail Resorts in 2002) and Northstar-at-Tahoe (owned by privately held Booth Creek Resorts), neither of which offers wireless. "We're not going to be able to measure the success directly," says Welton. "But once we start hearing people say, 'Hey, if you go to Squaw, you can check your e-mail,' we'll know it's a success."

For this gambit to succeed, Squaw executives have undertaken an aggressive on-site effort to alert visitors to the resort's latest addition. They're plugging the service on electronic message boards around the mountain and with brochures at Squaw's bars and restaurants. These efforts haven't yielded much in the way of awareness--or customers--thus far. Early in the season, only about ten skiers a day were signing up. "I'm accustomed to finding [wireless] access when I travel, but it was still a pleasant surprise," says Benjamin Ross, 35, an Oakland-based music producer, who stumbled upon it on a recent trip.

Squaw and Exwire plan to ramp up the marketing campaign, hoping that skiers who may not have brought their laptops will make a point of doing so on their next visit. Coming soon is a TV ad (paid for by Exwire) that will air on a Tahoe visitors' channel on the local cable network, and next season Squaw is considering printing information about the service directly on its lift tickets as well as renting out wireless-enabled handhelds that will let guests message each other, just as it currently rents two-way radios.

If it's successful in attracting users to its access offering, the resort hopes to roll out a variety of other services. They include letting parents locate their children through the wireless service, adding webcams to show snow conditions firsthand, providing real-time lift wait times, and even alerting guests to drink specials at Alexander's, a restaurant at High Camp.

Just as important to the company is its "ability to use the wireless technology to improve its operations," says controller Welton. Wireless service will enable computerized ticket scanning, providing better data on Squaw's customers, particularly season-pass holders. It should also keep lift lines moving, because employees will be able to process skiers while they're in line. Because of the system, the resort is exploring the sale of lift tickets off-site--at a local grocery, for example--so that customers could bypass the ticket window entirely.

Technology and winter sports have made strange bedfellows at Squaw for many years. In the 1950s IBM's then-CEO Tom Watson Jr. was a regular guest, as well as a friend of Cushing's. As soon as Squaw was awarded the 1960 games, Cushing says, he helped recruit IBM to create the Olympic Data Processing Center, which was located in the middle of the competition area and provided spectators with "a single vantage point to watch the competitions and view the results." Although those games are perhaps best remembered for the U.S. victory over the Soviet Union in ice hockey, Cushing recalls that the glass-walled IBM mainframe computer drew just as many awestruck fans as any of the events.