McDonald's Wi-Fi recipe could define industry

Signs at a McDonald's in downtown San Francisco cordially beckon customers to surf the Web using its wireless Internet service, but no one is biting during a recent Wednesday lunch hour.
In fact, none of the 20-odd patrons scattered about the restaurant's two dining areas appears to have a laptop computer or wireless PDA on hand. A few peer over newspapers, while others talk quietly or stare out the window over trays of french fries and hamburgers.

The scene is typical, says supervisor Margie deGroot, whose restaurant near Market and Second streets became, last year, one of the first McDonald's in the country to offer wireless Net access to customers: "Why would these customers use this service when they can go back to their offices to use their computers?" she says.

She's not the only one asking the question. So-called Wi-Fi wireless broadband technology is catching on fast with computer users and sparking a new service industry that aims to cater to an increasingly mobile Internet audience. But it's still early in the game, and companies aren't sure what formula--if any--will work best to attract paying customers.

Wi-Fi providers have targeted a growing number of potential venues within which to establish access points, including hotels, airports, phone booths and restaurants. Coffee vendor Starbucks and deli chain Schlotsky's have already launched commercial Wi-Fi services aimed at driving more foot traffic into their stores and keeping customers there longer, and they've reported some early signs of success. Earlier this week, Barnes & Noble said it is working with Cometa Networks to install hot spot networks in about 650 bookstores by September.

McDonald's has been testing Wi-Fi in partnership with three rival providers since July of last year and is expected to announce its long-term partners, its pricing scheme and the locations that will offer the service as soon as this month.