Until recently, ad blocking - the biggest threat to every Silicon Valley ad-driven business model - was largely a peripheral concern stemming from such companies as AdBlock, which was recently snapped up by a "mystery buyer" while ad-driven quasi-monopolies such as Google pay comparable adblockers to allow their ads through. That however is about to change because as the WSJ reports two Chinese-owned European wireless carriers are set to unleash online advertising blocking on their networks, which as the WSJ accurately summarizes, "threatens Silicon Valley’s prevailing business model."
However, instead of relying on potentially compromised third parties to block bandwidth-hogging ads, the networks will implement the technology within the actual pipe at the network-level: the operators, Three UK and Three Italia, are working with Israeli company Shine Technologies and plan eventually to roll out the platform to other wireless providers in their group.
According to the WSJ, the two carriers are owned by CK Hutchison Holdings Ltd., which is controlled by Asian billionaire Li Ka-shing and also owns wireless networks in Ireland, Austria, Sweden, Denmark, Hong Kong and Indonesia. Shine is backed by Mr. Li’s Horizons Ventures tech fund.
“We don’t believe customers should have to pay for data usage driven by mobile ads,” Tom Malleschitz, chief marketing officer of Three UK, said in a statement. “Irrelevant and excessive mobile ads annoy customers and affect their overall network experience.”
Shine’s platform prevents online-ad networks such as those operated by Alphabet Inc. from delivering display and video ads to browsers or apps. Unlike ad-blocking apps downloaded by customers to their devices, it works at the network level.
The CK Hutchison-owned carriers are not the first to take this aggressive step: last year, Jamaica-based wireless operator Digicel Group began working with Shine as the first operator to implement the technology so it could block advertising on its networks in the Caribbean and South Pacific. The carrier criticized online advertising companies, including goliaths like Alphabet and Facebook Inc., for not contributing to the costs of building the networks that deliver their ads.
More importantly, these are not some token networks: Digicel has about 13 million subscribers across the Caribbean, Central America and the South Pacific. Hutchison had more than 30 million customers across Europe as of mid-2015.
A comparable story from Bloomberg lays out the rising confrontation between carriers and ad-providers in more detail:
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