Google took aim at the mobile display ad market Nov. 9 when it bought AdMob for $750 million in stock. Google has made some headway in providing mobile search ads to the so-called third screen, but it has been lagging in providing mobile display ads, or in-application ads. AdMob fills those needs, ideally helping Google reach advertisers trying to engage smartphone users, and helping content publishers and mobile application developers get a cut of the money collected from ads paired with their content. This is key to Google's mobile Web strategy, where it's competing with Yahoo and Microsoft in the green field of mobile ads.
Google moved to fill a hole in its advertising arsenal Nov.
9 when it purchased mobile display advertising power AdMob for $750 million in
stock.
AdMob's technology platform helps customize digital display
advertisements to small screens on smartphones, whose full Internet browsers
make them a rich, new playground for mobile ads.
The company soared to success running mobile ads for Ford and Coca-Cola on Apple's iPhone, but branched out to support smartphones
running RIM, Nokia, Palm and Google's own Android operating system.
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To date, content publishers, advertisers and technology
providers have had a hard time putting ads in front of the millions of mobile
phone users. Google has made some headway in providing mobile search ads to the
so-called third screen, but it has been lagging in providing mobile display ads,
or in-application ads.
AdMob fills those needs, ideally helping Google reach advertisers
trying to engage smartphone users, and helping content publishers and mobile application
developers get a cut of the money collected from ads paired with their content.
This is key to Google's mobile Web strategy, the
foundation of which is Android. Google wants to see Android find purchase on as many
smartphones and mobile gadgets as possible, and for users to use Google
applications powered by Android.
Google aims to pair its Web services with its search,
mobile and in-app ads. This would allow the company to expand its paid search
empire from the desktop Web to the mobile Web at a time when Internet rivals Yahoo
and Microsoft are struggling to do the same.
"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," said Susan Wojcicki, vice president of product management at Google,
in a statement.
A big buy like this by Google is sure to attract the
attention of federal regulators, privacy pundits and other experts who feel
Google is getting too big for its britches. On a special Web site clearly
designed to temper concerns about what this buy will mean for the competition,
Google said:
"Mobile
advertising is a rapidly growing and competitive space, and Google and AdMob
are currently specializing in different areas. Though Google offers many forms
of mobile advertising, its focus to date has been on mobile search ads, while
AdMob's focus has been mobile display ads and in-application ad."
Google further claimed the deal will bring new innovation
and competition to mobile advertising, leading to more effective tools for
creating, serving and analyzing mobile ads formats. This will in turn serve well
the developers, publishers, and advertisers trying to make money from the
mobile Web.
Google also noted that its bid for AdMob is akin to
mobile ad buys AOL, Microsoft and Yahoo have made in the past two years. AOL
acquired Third Screen Media, Microsoft bought ScreenTonic and Yahoo purchased Actionality.
Still, Google is the overwhelming search market leader
and for that distinction it undergoes intense scrutiny for any acquisition
these days, particularly in the wake of acquiring display ad giant DoubleClick
for $3.1 billion and video-sharing power YouTube for $1.65 billion.
Regulators will likely look hard at Google's latest
acquisition, which is expected to close in the next few months. Google
CEO Eric Schmidt a few weeks ago said the company could buy a company
per month in search, mobile ads and other areas.
Mobile & Wireless 
