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Hotspot Invaders

As municipal WiFi networks begin to roll out in cities across the U.S., users are discovering that there's no such thing as a free wireless connection.

To fund and deploy WiFi networks without charging subscription fees, some cities are turning to advertising-supported models, including systems that insert new ads onto existing Web pages and so-called "interstitial" ad pages that appear when users click on hyperlinks. (See SF Muni WiFi in Low Gear.)

In addition, Google has said that its proposed citywide WiFi network for San Francisco would serve as a testbed for location-based ads and services. (See Google's Ad-Mad Network .)

Such revenue-generating plans, says Eric DaVersa, VP of business development at NetLogix, which today said it will partner with Web advertising company Adzilla to provide ad-serving solutions to muni WiFi operators and service providers, will ultimately benefit cities, network operators, and users.

"The beauty of the model is that for a network operator, who doesn’t have a fleet of ad salespeople for these municipal networks, Adzilla provides that infrastructure," says DaVersa. "This will dramatically improve the revenue model."

Many mobile users have come to expect free WiFi networks in places like coffeshops, libraries, and airports; and as the technology becomes more widespread, such networks will be a competitive advantage for cities, points out John Pilger, a spokesman for the city of Sunnyvale, in northern California.

"We're the heart of Silicon Valley," says Pilger, "and being wired -- or, in this case, unwired -- is really important to businesses and the community and ultimately the economy."

Sunnyvale has a new metro WiFi network, powered by access points set up on city lampposts, developed by MetroFi Inc. , a Mountain View, Calif.-based builder of wide-area WiFi networks. The network, says MetroFi CEO Chuck Haas, is supported by ads that appear in users' browsers as they surf the Internet.

Similarly, the NetLogix/Adzilla system serves ads to users in the form of additional banners that appear in what NetLogix calls "premium new space" inserted at the top or bottom of existing Web pages. The NetLogix technology will also "optimize" existing keyword ads to make them more relevant to users, based on their Web surfing habits. Eventually, according to many Internet ad companies, such services will be able to target ads based on a user's location.

"We're getting the permission of Web publishers themselves right now to place these ads," explains DaVersa. "This is a new technology, and we don’t want to offend anyone who's providing revenue streams to the current publishers."

Offending users and network operators could be another roadblock for these revenue models. Ad-supported muni WiFi is a terrific idea, says Dana Spiegel, executive director of NYCwireless, which provides free WiFi in Manhattan -- but "It's critical that this advertising shouldn't interfere with the use of the network."

NYCwireless uses splash pages that appear when users log onto the network that contain a usage agreement plus an area for logos from supporting organizations. The ads -- essentially just logos for the organizations that help fund the network -- are confined to the splash page.

"The idea of artificially inserting ads into Websites that are viewed on the network is an appalling idea that has another name: adware," says Spiegel. "NYCwireless would never endorse any program like that, and we feel it would create a bad experience for the people that use our networks."

User tolerance for ad-cluttered Web pages has been tested before -- thus the pop-up blockers now standard on many Web browsers -- and it's not clear that users will be willing to tolerate additional ads in order to gain access to supposedly "free" muni WiFi networks. For cities offering such networks as well, the association with ad-supported networks could raise sticky questions.

"From our perspective, at this point we're letting the market figure out what it wants," says Sunnyvale's Pilger. "Since MetroFi is setting this up in the city, we're happy to see them do that. That does not mean that other avenues might not be pursued in the future."

— Richard Martin, Senior Editor, Unstrung

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