The dream of free municipal WiFi refuses to die. Meraki Networks is picking up the ball that Google and Earthlink dropped, expanding its free WiFi network to cover all of San Francisco. The service will be ad-supported (ads appear in your toolbar when you are browsing through a Meraki WiFi router), and the build-out will be paid for out of a $20 million series B round the startup just raised from Sequoia Capital, DAG Ventures, Northgate Capital and other existing investors. This round is on top of $5 million Meraki raised last February from Sequoia and (ironically) Google and former Google employees.
Meanwhile, Google’s once-vaunted WiFi initiatives have dwindled down to providing free WiFi only in Mountain View, CA (where Google is headquartered). And Google’s biggest WiFi champion, Chris Sacca, is now gone. Google’s WiFi effort in San Francisco is all but dead, mostly because its partner, Earthlink, decided to get out of the municipal WiFi business.
So why does Meraki (and its new investors) think it can succeed where Google failed? Well, for one thing, it is already providing free WiFi to 40,000 people across two square miles of San Francisco. (With about 500 WiFi repeaters supporting them). It is simply expanding that program (to about 10,000 or 15,000 repeaters). Second, free municipal WiFi is not Meraki’s only business model (more on that below). It is using San Francisco basically as a giant demo for other cities. But, third and most important, its mesh technology is a cheaper way to blanket a city in wireless broadband than through standalone WiFi hotspots.
Meraki’s WiFi routers connect to each other through a mesh network, meaning that many can share a single broadband connection. They are cheap, can be placed outdoors on rooftops and balconies, and can even be solar-powered. The company expects that it will only cost a few million dollars to cover all of San Francisco, compared to the $14 to $17 million estimated for the Earthlink/Google plan. “There is a pretty drastic cost advantage,” says CEO Sanjit Biswas. “Our network will come in at the low, single-digit millions,” he predicts. Meraki will even offer residents free repeaters to amplify the WiFi signal inside their homes, and shoulder the entire cost itself rather than ask for public funds. All the routers will also be on private property, not public property, and thus avoid the politics of involving the city government.
Whether or not Meraki can prove that local ads will bring in enough money to cover its costs, though, is a different question. Meraki will show single-line text ads from Google that are localized as well as contextual ads from Yelp. Even Meraki CEO Biswas is not sure there is a big enough inventory of local ads to support an ad-driven model, but he sees the San Francisco deployment more as a showcase and as a test bed. “It helps us to have a live testbed with thousands of users,” he says, adding almost casually: “It would be cool to figure out an ad model.”
He is not being glib. Meraki’s real business opportunity is overseas with telecom companies in emerging countries like India and Brazil, who desperately want a cheap way to spread broadband and charge for it. Meraki makes a little bit of margin on its hardware (routers go from $49 to $199 each), but the real money is in managing large networks in partnership with telecom companies, where Meraki takes a 20 percent cut of the access fees they charge. The free WiFi in San Francisco might help build some buzz, but it is not going to spread anywhere else—unless those local ads start bringing in some real cash.
You just made our day !
How much am I hoping this is going to succeed?
(Hint… A lot!)
I think Google failed because they have become the typical large corporation. They are bogged down with layers and layers if mid level managers who may be tech savy but don’t really know squat about building business outside their comfortable box. I can see this company making it work. Lean can be mean.
@3 I agree…
Way to go guys! I can’t wait for blanket wi-fi everywhere!
Yeah, here in Australia there doesnt seem to be anything like this. Will be interesting if it Succeeds in the States, how long it takes a company to mimic them here in Aus
Woo-hoo! Sequoia Capital, DAG Ventures, and Northgate Capital just financed Meraki to cover SF in technology that will be obsolete in two years. Good news! /sarcasm
@ Viralking, AMEN! That’s exactly why I’m hoping it takes off…
i think Google never intended to finish the free wifi project they promised, the whole project is a hoax, as always, Google is good at “vapor-ware” to get free PR.
very cool. looking forward to being in san francisco in the future and testing this out.
quick question though, will people be able to use wireless voip phones anywhere in the city now?
Oui, get by with a little help from our friends…
I don’t understand the whole “Google failed” angle here except as an attention-getting headline. Google and Earthlink were waiting on the city of SF to actually give approval and sign contracts. They never did before Earthlink decided to pull out entirely. I could this portrayed as “SF failed” or “Earthlink failed” but not, of all things, “Google failed”. Then again, those other headlines don’t get as much attention.
I used to pay for WiFI access when I lived in Taipei. I paid a student price of roughly ten bucks per month. The bad part was that it worked so so when the subway was between stations, and I mainly used the service when I was riding the subway. But it was definitely nice for sitting in a park or in some café and they’re expanding the network everyday. I’ll try to get myself one of those EEE PC’s when I go back this summer and see if things have improved.
@12, it was as much Google’s project as it was Earthlink’s. Maybe they picked the wrong partner. Maybe they picked the wrong city. Maybe they picked the wrong technology. For whatever reason, the project failed.
When the project was first announced, Google got most of the credit for it. Now they deserve their share of the blame. The project was always associated with Google more than it was with Earthlink. It was their baby.
And yes, the point of a headline is to grab readers’ attention, but this one is not inaccurate. I can’t put the whole story in the headline. It’s long enough as it is. You have to read the story to get all the details.
Meraki gave a great demo here at CES this morning showing how they are bringing solar powered mesh networking to developing world (as well as SF!). Very impressive real time mapping of a Chilean fishing villages mesh network.
No, Schoenfeld this is incorrect:
“When the project was first announced, Google got most of the credit for it. Now they deserve their share of the blame. The project was always associated with Google more than it was with Earthlink. It was their baby.”
It was politicians on the S.F. Board of Supervisors who kept stalling Google and preventing the Mayor’s agreement with Google from getting approval. Our free WiFi is being provided now to over 120,000 S.F. residents by Meraki (a start up funded by Sequoia Capitol one of the major owners of Google, and with 5 million dollars from Google itself. You falsely malign Google.
If you had fact checked your story, or actually live in San Francisco you would know the facts. i