hereUare On the Block
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San Jose, CA- based hereUare Communications, an aggregator of commercial Wi-Fi-based hotspots around the US and overseas, has put itself up for sale with a self imposed deadline of two weeks.
According to hereUare co-founder and executive vice president Steven Cochran, "if it doesn't, we'll wind the company down and it'll go away."
Winding down will be not only hereUare, but its wholly owned subsidiary, WiFi Metro, a San Francisco company that launched in January with over 40 public access points in the area (as well as some in Seattle and Chicago). WiFi Metro's public access areas are organized into "hotzones" that cover entire downtown neighborhoods. It's networks are run on hereUare's eCoinBox technology.
hereUare's business model is simple: They provide access control and back-office solutions to partner WISPs.
The reason for the sale is simple also, and not surprising: it's "the inability to raise money in this environment," says Cochran. "Our investors said we're not putting any more in, so shop the company."
The move to be acquired is not a surprise to the company brass. As far back as March of this year, hereUare's CEO Clark Dong told InternetNews.com that "Ultimately, we're going to be picked up by a carrier."
Carriers, especially those still in the throes of 3G build out, would welcome a hotspot business according to Suzzana Ellyn, Wireless Data Research Analyst for ARS, Inc. "The Wi-Fi market is perfect for the carriers who've invested millions in 3G to provide a solution today that can offer high speed access to customers."
Cochran is confident a sale will not be a problem. "No one has a system that's been out longer or is more robust," he says. "We were the first to do it; we invested two and a half years. There's no system that could top ours. There's some newcomers that have come, but they're not proven."
David Chamberlain, wireless Internet services and networks research director for NJ-based Probe Research concurs on the sale: "It's clear that there are some companies that have a bunch of money that starting to put some effort into commercializing Wi-Fi. Short-term, I would say we're real close to having a seller's market for Wi-Fi hotspots."
Cochran says that hereUare is already in talks with computer and communications companies in the US, as well as one in Japan.
"We have a production system running in Japan as we speak -- a pilot site in DoCoMo stores in Japan, selling prepaid scratch off cards. You can pay X number of Yen and it gives you a user name and password [for a limited amount of time]. That's been operational for about six months now."
The companies (both hereUare and WiFi Metro) have been paired down to nine employees in total, the absolute minimum number of personnel needed to keep things running.
This is not the first blow hereUare has faced this year. In March the company's partnership with MobileStar ended when the latter's new owner, VoiceStream, took over. The move left hereUare down 600 hotspots (located in Starbucks coffee shops) around the country, more than half of its existing nodes at the time. MobileStar was integrated into what is now T Mobile Wireless Broadband.
Should a sale of hereUare's assets not take place, there's little hope for end-users reliant on hereUare systems.
"If we don't get a host company and we go away, the systems will not run," says Cochran. "We don't foresee that, but it's a possibility."
Eric Griffith is the managing editor of 802.11 Planet. Jim Wagner contributed to this article.