Google strengthens mobile advertising play with AdMob acquisition

Web giant Google upped its game in the mobile space and strengthened its presence in advertising this week with the acquisition of mobile advertising player AdMob for $750m.

According to Google, the deal will bring new innovation and competition to the nascent mobile advertising market, and will lead to more effective tools for creating, serving, and analysing emerging mobile ads formats. Google and AdMob currently specialise in different areas, with Google’s focus on mobile search ads, while AdMob’s focus is mobile display ads and in-application ads.

Omar Hamoui, chief executive of AdMob, commenting on the deal, said: “Until now, it has always felt like those of us involved in this space played second fiddle to our online brethren. I believe that time is over.”

Hamoui said that Google would absorb his entire team, with the two companies working to maximize ad revenue for the more than 15,000 mobile web sites and applications that make up AdMob’s publisher network. “Our ads will become more relevant, our products more robust, and our monetization capabilities more significant,” he said.

The AdMob chief also sang the praises of Apple for revolutionising the mobile applications market and kick starting the in-app advertising business. Even Google, which competes with Apple on a certain level with its Android operating system, acknowledged the Californian firm’s effect on the mobile space.

According to Google, iPhone and Android users browse the internet more often than anyone else using mobile platforms, contributing to Google’s five times mobile search growth over the past two years. And a quarter of these same iPhone and Android users spend nearly 90 minutes per day using applications on their devices, the firm said.

“Apple solved so many problems that had plagued mobile for so long. They showed all of us the way forward and their efforts have led to a landslide of rapid improvements in our space,” Hamoui said. “We launched the first iPhone ad units focused on the web and quickly added the capability to run ads in applications. Now with the addition of excellent devices from Palm, Nokia, RIM, and plethora of Android powered smartphones, we have all the preconditions necessary for what will be a tidal wave of mobile browsing and app usage.”

Potentially, the move could also provide users with more free or low-cost mobile apps, since it will allow developers to subsidise their products through effective mobile advertising, Google said. It will also encourage more mobile web content by providing mobile web publishers with better monetisation options and mobile users will see more relevant, useful ads on their devices.

According to recent figures from market research firm eMarketer, US mobile advertising spending is set to rise from $320m in 2008 to over $1.5bn in 2013.