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Google Picks Up AdMob In $750M Deal

Posted on: Tuesday, 10 November 2009, 05:45 CST

With the much anticipated integration of smartphones and handheld devices into primary computers coming to full fruition, Google is working to have an equally strong foothold in the cell phone market as it does in the Internet.

The search engine giant announced a new deal on Monday to buy mobile ad network AdMob for $750 million in stock to ramp up its efforts to sell advertising on cell phones, reported Reuters.

Google bought its current mobile ad delivery system DoubleClick Mobile through its $3.2 billion acquisition of DoubleClick Inc. in 2008.

According to Google,  buying AdMob will give the company better insight and expertise in a market that is expected to take off over the next several years.

Google shares rose $9.84, or 1.8 percent, to $560.94 in afternoon trading.

Despite the work Google does in other areas, including Google Apps, Android, and Google Voice, advertising will likely remain its primary source of revenue. Google now dominates the most profitable segment of online advertising through its search engine.

Unlike the personal computer-based Internet, the mobile Internet advertising business has yet to be established and unified. There are now dozens of companies claiming to have a key role in the market.

AdMob was founded in 2006 by Omar Hamoui. The San Mateo, California-based company focused primarily on providing tools that allow Internet advertisers to follow potential customers to their mobile devices by buying a spot on Web sites made to accommodate mobile devices.

"I think people underestimate how important ads have been to funding the development of innovative content on the Internet," Hamoui said.

"Our goal all along at AdMob has been to make it possible for developers and publishers to bring their products and ideas to mobile with the same business model."

"As publishers and developers generate more revenue from their mobile products, they will invest more, and their mobile offerings will become richer, more creative and more robust," Hamoui explained.

"We're proud of the progress we've made towards accomplishing this goal, and joining Google will only accelerate this process, ultimately leading to very real benefits for end users around the world."

Though Hamoui says he does not know how much market share his company has in the business of providing mobile ads to Web site publishers, the company is widely considered to be one of the most powerful contenders in this area because of its work with ad units for iPhone applications.

"Mobile advertising has enormous potential as a marketing medium and while this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time," Susan Wojcicki, Google's vice president of product management, said in a statement.

Ultimately, people will be seeing more ad-supported content and applications on their smartphones if Google's vision of AdMob's future comes true.

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On the Net:

• Google
• AdMob

Source: RedOrbit Staff & Wire Reports

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