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Microsoft joins JiWire to test muni Wi-Fi advertising

Companies will test use of ads to subsidize Wi-Fi network

July 18, 2007 12:00 PM ET

Computerworld - Microsoft Corp. today announced an alliance with mobile advertising provider JiWire Inc. to begin placing ads on municipal Wi-Fi networks, starting with Portland, Ore., and Oakland County, Mich.

The two companies would not disclose terms of the alliance but said they will place ads in a variety of styles, including so-called ultramercials, which are interactive ads that Wi-Fi users agree to watch in return for free network access.

For example, a user might agree to watch an interactive ad for two minutes in order to get several hours or more of access, said Stefan Weitz, director of planning for Microsoft's MSN Web portal.

Microsoft is interested in using municipal Wi-Fi networks to expand the reach of MSN, Weitz said. Meanwhile, cities and towns are seeking ways to pay for construction and operation of Wi-Fi networks.

"We're still figuring out if municipal Wi-Fi is a disruptive technology," Weitz said. "The jury is still out, but we expect to reach more people and different people and just provide a ton of content, so municipal Wi-Fi is just one more avenue to increase that."

As for the value of using advertising to subsidize costs, Weitz added, "offering consumers free or subsidized service is how we think we'll see heavy utilization on these networks."

Founded in 2003, San Francisco-based JiWire built a reputation for tracking Wi-Fi hot spots globally, and its list now includes about 150,000 hot spots in 135 countries, said CEO Kevin McKenzie.

In recent years, JiWire has built an advertising client list of more than 50 of the nation's biggest companies, and these advertisers are willing to pay a premium to place ads on hot spots, McKenzie said. Hot spots in airports and hotels reach a coveted segment of the overall Internet audience, he said.

JiWire clients will typically pay $35 to $150 for 1,000 advertising impressions, many times what a typical Internet ad would cost, McKenzie said.

Many cities and towns that are building or planning Wi-Fi services are wrestling with ways to recover costs or to provide free Internet access to some users, McKenzie noted. JiWire is approaching municipalities about advertising deals, starting with national advertising campaigns, and will be willing to share 50% or more of the revenue with the cities, McKenzie said.

Eventually, JiWire will move beyond running national advertising and find local advertising for municipal Wi-Fi networks, McKenzie said.

Weitz and McKenzie said that Oakland County will provide many opportunities to test a variety of advertisements because it is considered the nation's largest municipal Wi-Fi deployment; it will cover 900 square miles and serve 1.2 million people once finished.

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