Apple Buys Quattro Wireless to Battle Google in Mobile Ads

By Clint Boulton  |  Posted 2010-01-05

Apple has acquired mobile ad network Quattro Wireless in a deal worth a reported $275 million, or roughly one third of what Google bid to buy mobile ad provider AdMob.

Andy Miller, formerly Quattro CEO and co-founder but now Apple's vice president of mobile advertising, confirmed the acquisition in a brief blog post, where he noted:

"We are thrilled to let you know that Apple has acquired Quattro. We have built our business by enabling advertisers to reach the right consumers across the mobile Web and in applications. We remain focused on delivering more engaging, relevant and useful ads to mobile devices, and improving the measurement and execution of digital campaigns. Together with Apple, we look forward to developing exciting new opportunities in the future that will benefit our customers."

Apple declined to respond to eWEEK's request for comments on the deal, which was first reported Jan. 4 by AllThingsDigital.

The deal could accelerate the growing war between Apple and Google, friends quickly turned enemies in the pitched battle for the mobile Web. Apple makes the popular iPhone smartphone, which has sold tens of millions of units.

Google makes the Android operating system for mobile devices, including smartphones, and is expected to launch its own Android smartphone today. This Nexus One, reviewed in detail by Engadget, is speedy and elegant. Some who have used it say the Nexus One compares favorably to the iPhone.

But even though Android is playing on the iPhone's turf, Apple and Google have danced the dance of frenemies to this point. Apple's iPhone supports some Google applications, such as Google Maps and search, but forces others, such as Google Latitude and Google Voice (though not yet) to run as Web apps, distant cousins to the native apps on smartphones because they won't work without Internet connections.

This battlefront is clearly broadening to mobile ads, or at least the information Google and Apple can glean through placing mobile ads on applications. Google moved to buy AdMob, a successful provider for mobile display ads within iPhone applications, for $750 million.

This deal is being looked over by the Federal Trade Commission, which has antitrust concerns despite the fact that Google and AdMob together would account for only 24 percent of mobile ad sales, according to statistics from IDC.

The Wall Street Journal said in December that Apple tried to buy AdMob, which houses a lot of data about iPhone apps and the iPhone App Store that could be very useful to Google. The impetus behind Apple's bid seemed to be to block Google from gaining an asset that has collected a lot of information about the iPhone App Store.

What will Quattro, which IDC said commanded 7 percent of the mobile ad revenue in 2009, offer Apple?

Chris Dixon, co-founder of decision engine Hunch and an investor in multiple properties, argued that Apple's interest in Quattro must be about ads in mobile apps. He noted that while Apple tightly controls its iPhone app platform, Google could threaten Apple even on ads in iPhone apps. Dixon added:

"Unless Apple forced developers to use their ad network, iPhone app developers would select the ad network that provided the highest payouts, which - as with all ad networks - would depend heavily on which had the most advertisers. So the Quattro purchase seems to be mostly about Apple getting a base of mobile advertisers (not publishers) that will allow them to offer competitive payouts on mobile app ads (not mobile browser-based ads)."

Meanwhile, new Apple employee Miller promised that Quattro will continue to operate the Quattro Wireless network across all devices and platforms and that customers should not expect changes in their products and services.

Rocket Fuel