Saturday, May 12, 2007
FON throws of the tie-dyed t-shirt & lovebeads...
I nearly missed this and it's over a month old but it's still worth mentioning.
While a lot of people still think that FON is a grassroots, love & peace movement that promotes a broadband sharing "free-for-all" livestyle the real thruth is slowly emerging.
On April 6th FON anounced on it's blog that it is testing free wifi with ad-based revenue.
The idea is that someone can watch a viral type ad and is then allowed to surf 30 minutes. If you want to surf longer, watch another ad.
This move makes perfect sense and is long overdue. How else was FON going to recoup the money invested by providing their Fonera routers for free or almost free. Do a bit of Googling for the numbers of routers already shipped, multiply this by the cost price and you will see where all that funding money goes.
What will also be a problem to some extent is all those people flashing the Fonera router with DD-WRT firmware and using them for a different (non-FON) purpose.
FON has a clause built in that people that do so would have to pay the full price eventually but you can see the legal and logistical nightmare in trying to recoup this money...
I think that FON has performed a great marketing & PR coup by creating an image of being a grass-roots community while almost certainly having a commercial and more profitable long term strategy in mind. This allowed them to perform a huge international land-grab. However I also see a number of current Foneras un-subscribing when FON starts providing a more commercial service.
Their businessmodel is also hardly new or innovative; in early 2002 a Dutch company called "HubHop" set about creating a simmilar network where users/subscribers could share their wireless broadband access. Shortly after this HubHop starting rolling out their network of commercial wifi hotspots and in Q3 2004 Hubhop was acquired by KPN for 4 million Euro.