The search giant acquires an ad network in the hopes of dominating the mobile market.
In its third acquisition this year, Google announced today that it planned to purchase AdMob, a mobile advertising network based in Silicon Valley, for $750 million in stock. The three-year-old, privately held company serves display ads on 15,000 different web sites and applications designed for mobile phone browsers. AdMob, based in San Mateo, California, claims that its campaigns have reached between 60 percent to 70 percent of the iPhone users worldwide, or some 20 to 25 million people monthly.
Google's move into the mobile-advertising market is no surprise. Despite the buzz and increased adoption of its Android operating system, Google has struggled to establish itself as a leader in the fragmented market in the way that it dominates Web-based advertising.
In a note posted on AdMob's website, founder Omar Hamoui said that the Google deal should help the company speed up its development of new products and penetrate the market more quickly. "The best part of all this is what's next," Hamoui wrote. "We are not going away."
In a recent interview, AdMob's vice president of marketing, Jason Spero, said that the strength of his company's technology was that it let advertisers target consumers in a number of ways. "They can target by gender, by age. They can target by type of phone, by type of content where the ad runs—they can say, ‘I want my ad to run on sports sites or news sites or game sites.' Then on top of that, we offer the ability to target by zip code," he said.
AdMob gets the data to help advertisers target specific demographics from the publishers of those mobile websites or applications. And based on that data, the network can serve the right ads to the right consumers in matter of milliseconds.
For entrepreneur Hamoui, the deal is particularly sweet given that two previous mobile-web companies failed because they could not attract enough traffic (let alone revenue) to survive. The false starts prompted Hamoui to launch AdMob to help companies make money on the mobile web. "It was so frustrating to build what I knew was an incredible service only to find myself unable to distribute or monetize the product without a carrier or handset deal," Hamoui said in his post announcing the sale. "Turns out, I wasn't the only one."