Google acquires mobile marketing startup for $750 million

SEARCH leviathan Google is buying mobile advertising network AdMob for $750 million, underlining its determination to extend its market leadership to the mobile internet.

When the deal is concluded - within the next few months - the AdMob acquisition will be Google's most expensive purchase since the acquisition of ad service DoubleClick for $3.2 billion in March 2008.

AdMob shares at least one similarity with DoubleClick, in that its system specialises in delivering display advertising. Currently, Google makes most of its money from text-based ads connected to search requests, but has been keen to become a bigger player in display ads as they are a format favoured by bigger brands with bigger budgets.

With many major markets seeing increasing levels of smart-phone penetration with devices such as the Apple iPhone and the recently released Motorola Droid, there are increasingly new opportunities for advertisers to peddle their wares.

US mobile advertising is expected to reach $1.6 billion by 2013, up from an estimated $416 million this year. The figure is still dwarfed by the traditional online ad market - estimated at about $23 billion this year.

AdMob Chief Executive Omar Hamoui started AdMob less than four years ago. Commenting on the Google deal, he said:

“After our deal with Google closes, we will work together to accelerate the pace of innovation in this area. Our product and engineering teams will keep building great products for all of our customers. Our business development team will keep working to maximize ad revenue for the more than 15,000 mobile Web sites and applications that make up AdMob's publisher network. Our sales teams will keep working with our thousands advertisers to deliver successful campaigns and our marketing group will keep pushing to get the word out about mobile. It's just that now we will be able to do an even better job for all of our customers.”

Google's decision to acquire AdMob may trigger more acquisitions and investments in the mobile ad niche, with companies such as JumpTap, Millennial, Mojiva, Mobclix and Quattro Wireless, likely to attract suiters

Now AdMob currently serves up hundreds of millions of ads across roughly 15,000 sites accessible over mobile phones, with advertisers including Coca-Cola and Ford.

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