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AdMob Acquired By Google

google-admob.gifThe big news of the week is that Google has acquired leading mobile ad network AdMob for $750 million.

AdMob says they will continue to operate the AdMob mobile advertising platform, but after the acquisition by Google they “will work together to accelerate the pace of innovation in this area.”

AdMob was founded in 2006 by Omar Hamoui, who took a sabbatical from his MBA studies to setup the company. It has since served over 125 billion mobile ad impressions, and has grown to have a publisher network of more than 15,000 mobile Web sites and applications. Read the MobiAD interview with Omar.

AdMob believes the acqusition will benefit advertisers in 3 key ways:

  • Increasing our investment in building innovative and engaging ad units across platforms and to further improve targeting and tracking.
  • Building even more powerful relevance and optimization capabilities.
  • Improving the already high level of service and support we deliver to our advertisers.

This is an interesting move, as it is one of the first big acquisitions by Google in the mobile space. Much of their activity previously had been focused on trying to serve the mobile market be modifying or extending their existing online services.

As Paul Palmieri, President & CEO, Millennial Media commented, “Today Google validated what many companies including Millennial Media have thought for years – that mobile is a different market with a huge potential for advertising; possibly a bigger opportunity than online media. We are happy to see a player like Google bring economies of scale to the performance advertising space in mobile.”

There has for a long time been speculation about when AdMob would get acquired, and by whom. A few weeks ago when Google CEO Eric Schmidt said that they were going to pick up the pace of M&A, maybe that should have been a hint to the industry.

AdMob has a very strong presence in the area of mobile display advertising, both for mobile web pages and also for in-application advertising. This makes the acquisition a particularly good match for Google, as they are quite strong in the mobile search ad area, but not display.

Even after this acquisition, the one remaining sector of mobile advertising where Google does not yet have a strong offering is for SMS advertising. Google’s next acquisition?

Looking at the numbers, it has been reported that AdMob’s revenues are getting close to a $100 million per year run rate. And as the standard split they give to publishers is 60%, this means that they should be seeing around $40 million of that to fund their 140-employee company.

Commenting on the acquisition, Ben Tatton-Brown, CEO of mobile media agency RingRing said, “This acquisition is a milestone for our industry, and validates the potential of mobile advertising. And we are very confident for the future as we are still seeing rapidly increasing levels of spending in the mobile advertising market.”

11.11.2009    Tags: , ,
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