Microsoft is teaming up with advertising technology provider JiWire to begin placing ads on municipal Wi-Fi networks in the US, currently being built and tested by MetroFi in Portland and Oakland.

Terms of the deal were not fully disclosed by the companies, but they have said they will share revenue from advertising. The companies will place ads in a variety of styles including banner ads and so-called 'ultramercials' that will be required to watch before users can get 'several hours or more' of access to the network.

Ad-supported citywide Wi-Fi networks are not new. Yesterday we reported about London's similar ad-supported metropolitan Wi-Fi network - which offers a paid option as well. San Francisco also plans to roll out its Wi-Fi network, which is currently being built by Google and EarthLink.

This could potentially be a very lucrative business for both companies. JiWire has built an advertising client list of more than 50 of the nation's biggest companies, which typically pay $35 to $150 for 1,000 advertising impressions, many times what a typical Internet ad would cost. In addition, Microsoft is also expected to provide homepage content, allowing them to expand the reach of their existing MSN sites.

The Oakland network will be the nation's largest municipal Wi-Fi deployment; it will cover 900 square miles and serve 1.2 million people once finished.