Boingo Wireless Buys Ex-Googler’s Cloud Nine Media, Digs Further Into Sponsored, Free WiFi And Ads

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Boingo Wireless may have made its name with paid WiFi hotspot access, but today it is doubling down on free: the public WiFi operator is buying Cloud Nine Media, a startup co-founded by ex-Googler Sebastian Tonkin that specializes in sponsored WiFi services, which in turn cost nothing for consumers to use. Financial terms of the deal were not disclosed.

The acquisition is a mark of how public WiFi services are evolving to a point where, with the rise of smartphones — and especially tablets and gaming devices that do not have cellular access — more people are expecting access wherever they are without going through the trouble of paying for it, and how Boingo needs to change with the times. Boingo provides managed WiFi services in public places like shopping malls, airports, and restaurants, with its 500,000 hotspots covering some 1.5 billion people each year worldwide. Since opening for business in May 2010, Cloud Nine has picked up deals with 6,000 airports, hotels, and other public areas in the U.S. and Canada, who now offer WiFi access free of charge, “brought to you” by sponsors who get 30 seconds of airtime with users before they can proceed with Internet access.

This is something that Boingo has already been doing to some extent: this summer the company teamed up in a promotion for Google Offers to provide free WiFi across New York City’s transportation network and 200 other hotspots. The Cloud Nine deal signifies that this kind of arrangement may now become a lot more common.

“As we’ve expanded our WiFi services into new venue categories, the demand for sponsored access and location-based advertising services has grown in parallel,” noted David Hagan, president and CEO of Boingo, in a statement. “Cloud Nine Media brings a formidable portfolio of tools and talent that will help us take our execution to the next level.”

Boingo is timing the news with the release of its Q2 results, which come out later today. In Q1, the company reported revenues of $24.19 million, missing analyst expectations. Its guidance for this quarter is between $25 million and $26 million (the company’s ticker, if you didn’t know it, is WIFI).

The acquisition also represents a setback for another company, and possibly a setback for another kind of public WiFi business model: JiWire has been Boingo’s advertising partner since 2008, serving premium, location-based ads on Boingo’s WiFi network. TechCrunch understands that this deal is due to expire at the end of this year and will not be renewed, with Cloud Nine taking on advertising responsibilities in addition to unmetered sponsored access.

“Since advertising and sponsorship [are] an increasingly important aspect of our WiFi service, it made sense to add that expertise to our core capabilities as a company and
move away from outsourcing it,” a spokesperson told TechCrunch.

The deal also gives Boingo a stronger foothold into the developer ecosystem in the Bay Area: Cloud Nine is based in San Francisco, while Boingo’s headquarters are in Los Angeles.

Tonkin, meanwhile, now becomes Boingo’s director of advertising products and
strategy, where he will oversee product development, network development and campaign execution; define product and network expansion strategy; and work with key advertisers and venue partners.

Tokin knows something about splash screens and analysing advertising data. Before co-founding Cloud Nine, he was a product marketing manager for Google, leading on acquisition marketing and community building for iGoogle and Google Analytics. His co-founder is Henry Liu, an ex-banker who had also founded InciteBot.