Where the Wi-Fi Money Is

The treasure and terror of the current state of technology investing will spill into view this week when Intel(INTC) formally introduces its Centrino chipset for mobile computing with a splashy television- and print-advertising campaign.

The semiconductor giant has vowed to commit more money to promoting Centrino than it did to promote the Pentium 4 -- a magnitude of ad spending that suggests desperation to change its public perception from a company known for making faster and faster desktop computer products to a company known for making products that release us from the desktop.

If this is truly an epochal shift in technology from the dead end of a wired past to the limitless horizons of an unwired future, you would think that investors would be salivating over the opportunity to make money in myriad ways.

Yet, except for highly diversified large-caps like Intel and Cisco Systems(CSCO), for which wireless networking continues to be just a promising side project, it's still hard to figure out where high-margin new business will get done.

Free Wi-Fi for Everyone

The problem is that wireless local-area networking -- commonly known today by the cute marketing term "wi-fi," short for wireless fidelity -- increasingly looks like the most destructive new technology to come along in recent memory. It is so inexpensive to deploy as a means to access the Internet at high speeds, and use is so addictive, that its very popularity could be its downfall.

The paradox is rooted in the weak overall economy. For rather than deploying wi-fi as a means to make money, several large companies recently have announced plans to give it away to build loyalty for their faltering core services. And once this genie is out of the bottle, it's hard to imagine how anyone manages to stuff it back in.