Google's (NASDAQ:GOOG) mobile ad revenue could top $4 billion alone in 2012, according to Piper Jaffray analyst Gene Munster, whose estimates come from the company's huge industry footprint on Apple's (NASDAQ:AAPL) iPhone and iPad and smartphones based on Google's Android operating system.
Thanks to platforms such as AdSense for mobile and the AdMob unit, Google offers brands search, display and ads served within applications, which help developers make money.
Google uses this triple-headed attack to lock up the mobile ad market versus rivals such as Apple (NASDAQ:AAPL), whose iPhone has sold more than 120 million units worldwide in the last three-plus years.
While Apple hasn't been able to maximize the value of its own iAd mobile ad service, Google has watched its mobile ad business grow from $1 billion annualized in 2010 to $2.5 billion through last year, according to statistics Google CEO Larry Page shared in the third quarter.
With its huge ad presence on iOS and Android phones, coupled with the absence of a major, credible mobile ad threat, Google's 150 percent mobile ad growth is poised to continue this year, according to Munster.
"On the advertising side, one source shows that Android is doing well as a percentage of mobile ad impressions on their network, which we believe makes sense since a greater portion of Android apps are free versus paid," Munster wrote in a Jan. 6 research note.
With Google's Android market share at more than 50 percent worldwide, Munster said Android "ultimately becomes the biggest platform for mobile advertising both for Google and the industry."
To get an idea of Google's online ad scale, consider that the $4 billion Google stands to make in mobile ad sales would comprise only 9 percent of the company's nearly $40 billion in 2011 ad sales. Yet that $4 billon would also equal Facebook's entire ad revenue sum for 2011.
That fact underscores arguments from analysts such as Henry Blodget. Blodget recently downplayed Facebook's huge user engagement lead over Google because the social network power hasn't figured out how to leverage its 800 million-plus user base and 7 hours per person, per month users spend on Facebook.
Meanwhile, Piper Jaffray's Munster said the ratio gap between time spent on mobile devices, where users see the mobile ads, and the mobile ad spend is narrowing.
"Mobile now accounts for 10.1 percent of time spent with media, up from 5.4 percent in 2008, but only 0.9 percent of advertising dollars," Munster said. "The shift to mobile will likely come at the expense of other over-indexed media like newspapers and magazines, but as we know from the shift to online advertising, the shift is likely to be slow and steady."
In other words, just as desktop online ads gouged traditional print ads over the last decade, print publications can expect to feel their ad dollars squeezed more and more by ads served via smartphones and tablets, where more and more consumers are spending their time consuming news and other media.