The recently announced dual bid with Earthlink to provide wireless coverage for San Francisco will prove a testing ground for Google to assess whether location based advertising over free wireless is a profitable business model. Google will provide a service with speeds of around 300Kbps for free with locally targeted advertising, an advancement of the company's current successful business strategy, whilst Earthlink will provide 1Mbps access for a monthly fee of $20. If successful, Google will be able to provide access to its free VoIP, email packages as well as internet browsing, amongst other services, to major US areas by 2008.

With sufficient potential to expand operations throughout the US and into Europe, Google could become one of the first Wireless Virtual Network Operators, presenting a significant threat to the traditional voice business of cellular/mobile operators.

"The argument that Wi-Fi and cellular are complimentary rather than competitive depends on who is operating the service," comments report author Adam Walkden. "Google's successful advertising based business model allows the company to offer services for free. If it can convert this business model to include local based advertising to Wi-Fi users, it poses a significant threat to mobile operators."

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