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Microsoft teams with JiWire to offer ad-based muni Wi-Fi

JiWire says it has the right model to make advertising on citywide Wi-Fi networks really work.

Microsoft is teaming up with advertising technology provider JiWire to offer advertisements on municipal Wi-Fi networks.

The companies are testing the new advertising service in Portland, Ore., and Oakland County, Mich.

The companies haven't talked about the details of the deal, but they have said they will share revenue from advertising.

Using advertising to subsidize or offer free Wi-Fi in citywide networks is not a new concept. San Francisco plans to offer a free tier of service when it rolls out its network. It has chosen EarthLink and Google to build the network.

But JiWire CEO Kevin McKenzie said that JiWire's approach is different from Google's approach. While Google provides text listings, JiWire will offer a 30-second commercial before people can access the network. The company will also sell banner advertisements.

Since the municipal Wi-Fi movement started taking shape a couple of years ago, politicians, community organizers and the companies building the networks have touted Wi-Fi as a cheap solution to myriad social and economic problems plaguing cities today. Some cities see it as a way to bridge the digital divide, while others see Wi-Fi as providing a third alternative to a broadband market dominated by the cable and phone companies.

But building and maintaining Wi-Fi networks costs real money. Advertising can help the defray the cost, but only if cities and network operators can get advertisers to pony up big bucks to run the ads.

This is where JiWire says it can help.

The network in Portland, which is being built by MetroFi, already uses advertising to provide free Wi-Fi in parts of the city. But McKenzie said that his company can get a lot more money for its ads than MetroFi can get on its own. He said that JiWire charges advertisers $35 to $150 per CPM, or cost per 1,000 impressions. By contrast, he said that MetroFi is probably getting CPMs in the range of $2 to $3 on its own.

This is big money. And it could be just what the muni Wi-Fi market needs to get off the ground.