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It all started in 1955 when a misprint of a Sears Roebuck & Co ad appeared in a Colorado paper. Instead of listing Santa's phone number, the ad printed the phone number for CONAD (Continental Air Command). The director in charge had his staff check the radar for signs of Santa, who reported updates to the children who called.
Every year since NORAD turns its high-tech radar system towards the North Pole, following Santa's journey as he deliver presents on NoradSanta.org. NORAD provides up to the minute info on Santa's every move via radar, satellites, Santa Cams, and fighter jets. In fact, Rudolph's bright red nose really is important - it gives off an infrared signature, allowing NORAD's satellites to detect his (and Santa's) whereabouts.
In 2004 Google got in on the Santa Tracking fun, so now you can use Google Earth and Google Maps to track Santa's trip. From your mobile phone: search "Santa" on Google Maps.