Sunday, May 25, 2008

NYTimes: FON's struggle

"These days, commercial victory on the Internet is all about scale, and Mr. Varsavsky, a 48-year-old from Argentina, can be forgiven for speaking longingly and in detail about his peers’ achievements. No stranger to success — he has had a tidy crop of new media and telecommunications hits since the 1990s — he is still struggling to bring his newest Internet venture to fruition.

Three years ago, aiming to create a global wireless network, he founded FON, a company based in Madrid that wants to unlock the potential power of the social Internet. FON’s gamble is that Internet users will share a portion of their wireless connection with strangers in exchange for access to wireless hotspots controlled by others.

The swaps, in theory, would allow “Foneros” to have ubiquitous, global wireless access while traveling for business or pleasure. But despite $55.2 million in backing from such corporate heavyweights as Google and BT, the former British Telecom, as well as newer enterprises like Skype and a handful of venture capital firms, FON and Mr. Varsavsky are still missing a crucial ingredient: scale."

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