Google AdMob Bid Galvanizes the Mobile Ad Industry

Google woke up the mobile ad market by offering to buy AdMob Nov.9, challenging moves made by Microsoft, Yahoo and AOL in the last two years. Google picked AdMob from a crowded field that includes Millenial Media, JumpTap and others. So, are the other mobile ad network players indignant or scared? No. The general belief is that the mobile Web ad space is a green field, and that Google's purchase of AdMob will pave the way for Internet companies to strike deals with others in the mobile ad network long tail. Analysts and executives from Millenial and Greystripe weigh in.

News Analysis: While Microsoft, Yahoo and AOL have all purchased mobile ad specialists in the last two years, the remaining players have been waiting for something, anything to galvanize their tender green field and open the door for more partnerships with Internet giants.

Google may have granted their wish by agreeing to buy mobile ad technology provider AdMob for $750 million in stock.

AdMob is a leading exchange for mobile display ads and ads served within applications for platforms such as the leading Apple iPhone smartphone, Google's Android, Palm, RIM and Nokia. Google already pairs text ads with its search engine on mobile phones, similar to the way it does on desktops, but it has yet to crack the mobile display ad or in-app ad nuts.

Many industry watchers characterize AdMob as a mobile Web version of DoubleClick, which Google acquired for $3.1 billion to strengthen its display ads for the desktop.

When you consider that Google's mission is to duplicate the success of its desktop Web advertising mission on mobile devices such as smartphones, the AdMob looks like a no-brainer. In the 24 hours following the announcement, reception to Google's offer has been largely positive from both financial analysts and AdMob rivals.

BroadPoint AmTech analyst Ben Schachter said the deal should help not only to provide more relationships with mobile ad publishers and buyers, but also give Google a solid platform for monetization of mobile inventory and the delivery, tracking, and reporting of mobile ad campaigns.

However, he expressed surprise that Google opted to buy, rather than build mobile display ad and in-app ad technology. Google launched AdSense for Mobile earlier this year to fill this need.

When asked why Google opted to buy AdMob, a Google spokesperson said that while it had its own technology, "the more we looked at what the engineers at AdMob had built and their deep knowledge of the mobile ad world the more it became clear to us that bringing on board would allow us to accelerate our efforts."

The spokesperson said it will continue to build its mobile ad technology with the help of AdMob's engineering team.

Kelsey Group analyst Michael Boland said AdMob is one of the handful of mobile advertisers, including Millenial Media, Jumptap and smaller startups, where the majority of mobile online ads are being spent. Since forming in 2006, the startup has been a one-stop shop for Land Rover, Ford, and Volkswagen to strike ad deals with publishers.