Google doesn't use latent semantic indexing. It does use a cruder form of semantic evaluation in it's algorithm and has been filing patents around it for about 7 years. It's main use has been in adsense and adwords - but anyone who has seen what an adwords broad match can be knows how crude it still is.
Search engine shave now introduced the LSI model. Now the documents appearing in search engine results are basically based on LSI or in order to appear in search engine results your documents should be semantically related. LSI basically helps search engines to find out what a web page is all about. It means you shouldn’t focus on a single keyword when optimizing your web pages and getting links. The web pages on your web site should be related and focus mainly on a special topic while using different words that describe the topic...To know more visit Advanced SEO Concepts