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Microsoft to join municipal Wi-Fi fray

Software giant will serve local content and ads to Wi-Fi users in Portland, Ore., under a deal with MetroFi.

Microsoft is jumping into the municipal wireless space with a deal to provide local content and ads for MetroFi's free wireless Internet service in Portland, Ore., by year's end, the companies announced late Tuesday.

Under the alliance, Microsoft will provide an MSN-branded local content page with restaurants, events, traffic, news, city government services and weather; a Windows Live Search box; and ads targeting keyword searches and topics of Web pages viewed.

"This is Microsoft's first public foray into municipal Wi-Fi, and Microsoft's commitment to the Portland network further reinforces the validity of the advertising-supported Wi-Fi model," said Chuck Haas, chief executive and founder of MetroFi.

Microsoft was mum on its Wi-Fi plans for the future but hinted that there are more deals to come.

"We do not have anything to announce today, but in the future we look forward to working with MetroFi and other wireless Internet providers and cities to provide consumers and advertisers with similar MSN content and services," Sam Klepper, general manager in the MSN Media Network Group at Microsoft, wrote in an e-mail earlier Tuesday responding to questions.

Microsoft's chief rival on the Internet services front, Google, has been moving aggressively into the municipal Wi-Fi area. Google is building an ad-free Wi-Fi network in its hometown of Mountain View, Calif.. Google also has a deal with EarthLink in San Francisco that is still being ironed out. Meanwhile, EarthLink is busy building Wi-Fi networks in other cities, including Philadelphia.

There are also other free Wi-Fi networks without ads. Spanish-based FON is providing a free Wi-Fi service to people who buy its Wi-Fi routers and then share access with other people in that area.

"Microsoft has been playing catch up when it comes to Google in their ad-serving technology. And, with good reason, they are looking at every opportunity that's out there to leverage their investment," said Charles Golvin, an analyst at Forrester.

The deal also makes sense for Microsoft because "it is one of the larger citywide deployments" and "it is in Microsoft's backyard," he added. Microsoft is based in Redmond, Wash., which is less than 200 miles away.

"Portland is a great city for many reasons: its population and square mileage is large enough for an interesting test without being unmanageable, the population is tech savvy, and there are many high-tech companies in the area," Klepper said. "There is a great mix of small businesses in the city, and the government is progressive and able to move rapidly."

The network will initially cover about two square miles around Pioneer Courthouse Square downtown, Haas said. During the next 10 months to 18 months the coverage area will be expanded to 95 percent of Portland, or more than 130 square miles of the state's largest city, he said.

Portland is the largest Wi-Fi deployment that MetroFi is building. The Mountain View, Calif.-based MetroFi has contracts to build municipal Wi-Fi networks in 12 other cities in the U.S., including Naperville, Ill., San Jose, Calif. and Riverside, Calif.