If anyone doubted that Google is, first and foremost, an advertising company, its $750 million acquisition of mobile advertising delivery company, AdMob, should eliminate such doubts.

Google’s all stock purchase of AdMob, announced last Monday, will see Google become one of the leading sellers of banner ads on iPhone applications and mobile-accessible webpages.

Forrester Research’s Neil Strother notes (as quoted in The New York Times):

“The deal shows that Google is serious about becoming a major player in the mobile advertising ecosystem,” said Neil Strother, an analyst with Forrester Research. “It puts Google in the front-runner position.”

Neil Strother and other analysts still warn that the mobile advertising business is in its embryonic stage, with sales of mobile ads amounting to just $160 million in 2008, according to the Kelsey Group. This is a fraction of the $23+ billion spent on web advertising in 2008, as estimated by the Internet Advertising Bureau.

Google is no doubt thinking long term, though, and the deal certainly gives it an early lead over its rivals Microsoft and Yahoo when it comes to delivering mobile ads linked to search queries.

The purchase of AdMob – which was founded in 2006 by Omar Hamoui in 2006 while he was still a graduate student at the University of Pennsylvania’s Wharton School – makes it Google’s third-largest acquisition, behind the company’s $3.1 billion acquisition of advertising company DoubleClick last year, and its $1.65 billion purchase of YouTube in 2006.

Source: Miguel Helft, “Google Set to Acquire AdMob for $750 Million,” The New York Times, November 9, 2009

This entry was posted on Tuesday, November 17th, 2009 at 4:32 pm and is filed under Digital Media, Mobile Marketing, Online Advertising, Search Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.