San Mateo, Calif.-based mobile phone advertising company AdMob Inc., which has a client list that includes Ford Motor Co. (NYSE:F) and Coca-Cola Co. (NYSE:KO), made itself a more attractive acquisition target when it
acquired up-and-coming rival AdWhirl in August. And with the potential for growth in the mobile ad market, it's no wonder Google Inc. (NASDAQ:GOOG) acquired AdMob for $750 million in stock.
This isn't AdMob's first brush with Google, either. In April, AdMob and Google's AdSense were
integrated with DoubleClick Mobile, an advertising delivery system for mobile devices. Google has been looking for ways to
augment its lucrative Web search ad business and acquired DoubleClick for $3.1 billion in 2007 -- its largest acquisition to date. One of the DoubleClick founders, who now leads mobile ad company Mojiva Inc., had some words about the AdMob acquisition. He said in a
statement that the deal "Confirms the legitimacy of the mobile advertising industry, and overcomes any skepticism of whether small screens can offer big opportunities to reach mobile consumers."
Citing unnamed research studies, AdMob recently said global
revenues for mobile advertising are expected to top $13 billion by 2013.
Susan Wojcicki, VP of product management at Google, said in a statement,
"AdMob is the quintessential Silicon Valley startup -- generating
impressive year on year revenue growth." And grow it has. AdMob opened a Singapore office on Oct. 31, saying that outside the U.S., India and Indonesia are its largest markets with a combined total of more than 1 billion requests in September.
AdMob made a slick move in acquiring AdWhirl, which allows mobile app developers to use AdMob or its competitors, such as Quattro, VideoEgg or Mobclix. Mobile app developers were flocking to AdWhirl because it gave them a choice of ad servers. Mobile gaming Web site PocketGamer said it was a classic case of a well funded incumbent buying a startup to gain control over a quickly developing market. Our sister blog Dealscape has funding info. and the
history of AdMob.
AdMob CEO Omar Hamoui wrote a blog
about the Google deal, saying "until now, it has always felt like those of us involved in this space [mobile ads] played second fiddle to our online brethren." Hamoui also had some serious accolades for Apple Inc. (NASDAQ:AAPL) and its iPhone:
We were so excited by the promise the iPhone represented that we shifted a significant portion of our attention to that device in its very early days. We launched the first iPhone ad units focused on the web and quickly added the capability to run ads in applications. Now with the addition of excellent devices from Palm, Nokia, RIM, and plethora of Android powered smartphones, we have all the preconditions necessary for what will be a tidal wave of mobile browsing and app usage. But let there be no mistake. Our business, and the mobile industry in general, owes Apple a debt of gratitude.The deal is a small but interesting bet for Google, which has a market cap of about $178 billion. AdMob and Google could prove to be a nice match as phones get more powerful. Google's Android software is used to operate smartphones, including Motorola Inc.'s (NYSE:MOT) Droid -- which some are calling the best
iPhone challenger yet. -
Baz HiralalSee our previous AdMob-AdWhirl postSee Hamoui's note
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