Business Week describes it as a battle for eyeballs: " Content providers who capture the growing municipal Wi-Fi market will be in a better position to enjoy higher traffic to their sites and greater customer loyalty."
To me the efforts by Microsoft and Google sound more like wireless Petri dishes: a place for them to experiment with how wireless ads will be consumed and delivered. The companies and their service provider partners all talk about the prospect of free, ad-supported Wi-Fi. But ad-sponsored infrastructure seems like a losing deal. Remember the dot-com companies that promised Internet access and a PC for the price of looking at a lot of ads? If ads-for-access was such an eye-popping business model, why are we all peeling off a few $20s every month for our broadband connections?
After the business models and novel partnership shake out, don't be surprised if they end up looking fairly conventional, and not a whole lot different than today's: infrastructure companies make their money on fees from subscribers for a fast, reliable Internet connection, and content providers get their money from ads.
The one thing you can bet on is that we're all going to, very soon, have some way to regularly make a wireless data connection. Will it be muni-backed Wi-Fi, cellular, or some other variation? I'd be guessing if I said I knew. And so are backers of the current spate of muni Wi-Fi projects.