Google set to acquire AdMob for $750 million
November 13th, 2009 by admin, 8 Comments »
San Francisco: In a push to expand its digital advertising empire to cellphones, Google has agreed to acquire AdMob, a fast-growing mobile advertising start-up, for $750 million in stock, the companies said.
AdMob is one of the top sellers of banner ads on iphone applications and web pages that can be retrieved from mobile phones. The acquisition could help establish Google as an early leader in the small but rapidly expanding mobile phone advertising business.
The deal shows that Google is serious about becoming a major player in the mobile advertising ecosystem, said Neil Strother, an analyst with Forrester Research. It puts Google in the front-runner position.
Strother and other analysts said that position could prove tenuous. The mobile advertising business, which has long been hailed as the next big thing, remains embryonic. Sales of mobile ads were just $160 million last year, according to the Kelsey Group, a market researcher, and the vast majority of it went to ads delivered by text message. By comparison, marketers spent more than $23 billion in online ads in 2008, according to the internet Advertising Bureau.
“The growing popularity of the iPhone and other powerful mobile devices ensures that mobile ads will become more ubiquitous, but predictions for the growth of the business vary widely. “We see mobile as a huge growth opportunity for us,” Susan Wojcicki, vice president for product management at Google said in an interview. “We see an opportunity working with an Admob to really accelerate our efforts in an important industry for Google.”
Google is already ahead of its rivals, Microsoft and Yahoo in one segment of mobile advertising business: ads linked to search queries. The acquisition of AdMob, whose ad clients include Procter & Gamble, Adidas and Land Rover, will help it expand in display ads.
The all stock deal is modest for Google, given it’s roughly $177 billion dollar market value. But it is the company’s third largest acquisition, behind the $1.3 billion deal last year for the advertising specialist DoubleClick and the $1.6 billion acquisition of YouTube in 2006.
As Google’s core business of selling text ads has been slowing, the company has been looking for businesses that could bring new growth. It has focused in two areas in particular: display advertising, a business where it has lagged behind rivals like Yahoo, and mobile advertising.
Google’s ambitious push into cell phones include mobile applications like search and maps as well as android software for smart phones. AdMob also sells banners that appear inside apps made for smartphones running on android, and the acquisition could help Google profit from that growing market.
Tags: Facebook, Google, Google Mobile ads, mobile, News, Technology, video
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