Skyhook Introduces Geo-Targeted Ads for Mobile App Developers

Skyhook Wireless is looking to provide mobile application developers with a new source of revenue with the introduction of location-targeted advertising to its software development kit.

The new capability will allow developers of mobile applications to embed — and earn revenue from — ads that will be delivered based on a user’s geography. The ads will be provided by Quattro Wireless.

Ted Morgan, founder and CEO of Boston-based Skyhook, said that mobile application developers frequently complain about the lack of an effective business model because “carriers make it difficult for them to charge money, and when they do allow them to, they take 50 percent.” The new service is intended to help developers avoid that pitfall in favor of an ad-supported model.

“Instead of having to charge someone $3 a month for a mapping application, or $2.99 for an instant message or Facebook application, they can just offer it for free and get paid from ads,” Morgan said.

Morgan compared the system to Google Adsense for mobile, but said it was better suited for handset browsers because of the nature of mobile search. “Mobile users are very different from normal Web users. They have a smaller attention span and smaller screen to work with, and they are by definition moving around,” he said, making ads delivered by location more relevant than anything Adsense or Yahoo Mobile could deliver.

Skyhook’s location-determining technology differs from many standard GPS services. Rather than work by satellite or cell towers, Skyhook determines a users’ location based on proximity to WiFi signals. The firm has mapped such signals in over 70 percent of the U.S., with more than 40 million access points around the world, said Morgan. By determining which WiFi signal a user is connecting through, Skyhook can determine that user’s location and deliver the most relevant ads.

“We think this is big for developers who are trying to make money,” he said. “It’s an easy way to get up and go and watch your balance go up every day on the Quattro site.”

Skyhook is not the first to offer geo-targeted ads for mobile users. In February, CBS Mobile announced a deal with mobile social network Loopt that could provide ads tailored to the neighborhood or even the block of a particular user.

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