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Business Bytes

Boingo could be a go

To those on the 3G network or who enjoy sitting in Starbucks for hours on end, it seems incredible that anyone would pay for wifi access. Boingo, a company with a wifi network that offered wifi subscriptions, finally realized the ridiculousness of its model and now offers wifi at no cost to the consumer, albeit at specific Manhattan locations.

Boingo now tentatively joins others in the new model of exchange, where companies provide services and receive consumer information and attention.  Boingo aids advertising companies in their quest to accurately target a consumer’s location because using Boingo ties the consumer to a specific wifi spot.  Without such a service, it is very difficult to verify a consumer’s location: some people turn location services off, some devices have no location services, and people do not necessarily fill out online forms accurately.

As evidence that wifi can provide value to advertisers by offering an exactly targeted audience, Boingo began a partnership with GoogleOffers to sponsor wifi at specific Manhattan hotspots.

Were Boingo to take the full-jump to free wifi, earnings would fall in the short-term: it would no longer receive revenue from subscriptions and so wait for ad revenue to increase.  However, wifi use is elastic: people consume much more as the price falls; the new model would likely catapult demand.  The potential audience would then attract new advertisers.

Boingo seems poised to take a jump in profitability if it would stay true to its name and go.



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