Internet search and advertising giant Google last night nailed its colours firmly to the smart-phone advertising mast by revealing it has agreed to acquire ad display tech firm AdMob for US$750 million in stock.
Google said last night that the acquisition will enhance Google’s existing expertise and technology in mobile advertising, while also giving advertisers and publishers more choice in this growing new area.
“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.
“AdMob is the quintessential Silicon Valley start-up – generating impressive year-on-year revenue growth – and we’re excited to welcome this talented team to Google,” Wojcicki said.
Google’s place in the world of mobile internet
Google is already a major force in the mobile internet world. Its Android operating system, as well as the forthcoming Chrome OS for netbooks, will drive the company’s presence in mobile computing and already Android is powering next-generation devices such as the HTC Hero and the newly launched Motorola Droid smart phone.
Speaking with Siliconrepublic.com in recent weeks during a visit to Ireland, Google CEO Eric Schmidt explained the rationale. “What we are doing is betting that by making the quality of the internet better, it benefits us in indirect ways and that’s how the revenues come in. Chrome is a faster browser. If you make a faster browser, you will do more searches and if you do more searches …”
“On smart phones it (Android) will be a great challenger, with great performance, great speed and great apps. How will Google benefit? Basically people will click on more ads,” said Schmidt.
“I think people underestimate how important ads have been to funding the development of innovative content on the internet,” said Omar Hamoui, founder and CEO of AdMob.
“Our goal all along at AdMob has been to make it possible for developers and publishers to bring their products and ideas to mobile with the same business model. We’re proud of the progress we’ve made towards accomplishing this goal, and joining Google will only accelerate this process, ultimately leading to very real benefits for end users around the world.
“As publishers and developers generate more revenue from their mobile products, they will invest more, and their mobile offerings will become richer, more creative and more robust,” Hamoui said.
Google said that the deal with AdMob will help it in its efforts to develop more effective tools for creating, serving and analysing emerging mobile ads formats. As this ecosystem continues to grow, the company expects these new marketing media to offer significant benefits:
- Advertisers will be better able to engage mobile users with AdMob’s ad formats.
- Publishers and developers will be able to monetise their content more effectively, which has benefits for the wider mobile ecosystem.
- Users will see more relevant ads and ultimately get access to more ad-supported content and applications – improving their mobile experience.
“Attracting the world’s top engineering talent and people with entrepreneurial vision to Google has always been crucial to our success,” added Vic Gundotra, vice president of engineering at Google.
“AdMob’s proven track record in innovating at speed will help maintain that culture – which is why we are so excited to be working with them.”
Both companies have approved the transaction, which is subject to customary closing conditions, Google said.
By John Kennedy
Photo: Ad display tech firm AdMob is now under Google’s wing.