San Fran Wi-Fi To Put Google's Ad Strategy To The Test
Google will serve up ads to Wi-Fi users depending on their location and the Internet searches they conduct. Don't be surprised if Google's experiment becomes a model for deals with carriers in other cities.
One of the country's most expensive and wired cities is about to get a little cheaper and less wired. San Francisco has awarded Google and EarthLink preliminary approval to provide all 50 square miles of the city with free or cheap Wi-Fi services. City officials say the project will narrow the digital divide between rich and poor and is a step toward universal broadband access.
But EarthLink's and Google's reasons for subsidizing San Francisco's Wi-Fi for between $10 million and $15 million over 10 years aren't entirely altruistic. Google has a chance to test a new advertising model with location-based ads, and EarthLink is looking to solidify its position as municipal Wi-Fi's leading carrier.
San Franciscans will choose from tiers of services. Those who want free service must settle for a 300-Kbps connection--and exposure to Google ads. For about $20 a month, EarthLink will provide a 1-Mbps connection, and it will offer businesses a 3-Mbps pipe with guaranteed quality of service. Though prices haven't been set, EarthLink is touting the offering as a "T1 replacement" to incumbent broadband or a second, redundant network for emergencies or network outages. However, as in other cities deploying Wi-Fi, one limitation will be spotty availability above the second floors of structures (see "One Nation, Under Wi-Fi").
Google will serve up ads to Wi-Fi users depending on their location and the Internet searches they conduct. Relevant links or a portal page might show users which movies are playing at their local theaters, for example. Web applications also could play a role: Google Local maps could open to where a user is situated and display locations of nearby pizza parlors.
Google doesn't plan to use San Francisco as a launching pad to become a Wi-Fi provider. "Google is not the one to build those networks," Chris Sacca, Google's head of special initiatives, said last week. "No one company can do it all."
But don't be surprised if Google's experiment becomes a model for deals with carriers in other cities. The company last month filed three patent applications in the areas of mobile and location-based advertising.
Google believes location-based ads and applications could increase demand for more wireless services and bring a new source of revenue to providers. "We hope we've touched off something, and that ultimately our applications and monetization channels will help more of these networks exist," Sacca said.
Though it will use a paid model, EarthLink also is tinkering with advertising as part of an ongoing relationship with DoubleClick, which collects information for ad targeting. Once mainly a dial-up Internet access provider, EarthLink has struggled to find good deals with carriers to provide broadband service over their pipes. Municipal wireless is a way around that problem for the company, which has deals in three other cities and 11 proposals in the works. "It's a response to, 'You guys need to go build your own networks if you don't like our terms,'" says Bill Tolpegin, EarthLink's VP of development and planning. "So, OK, we're building our own networks."
Privacy is another concern. Google's Sacca said his company takes privacy seriously, but its ad-supported model may raise hackles, as could EarthLink's partnership with DoubleClick. The Electronic Frontier Foundation and the Electronic Privacy Information Center claim the companies' bid was among the least respectful of privacy. The groups question how much information will be shared with third parties, whether users will remain anonymous, and the intrusiveness of personalized advertising.
What's certain is that Google and EarthLink have begun new journeys with their forays into municipal Wi-Fi, and the citizens of San Francisco stand to be more connected than ever.
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