Google Acquires AdMob in a Venture to Take the Lead in Smartphone Marketing

Google is buying AdMob,a company  which specializes in ad placement  on mobile devices. With smart phones and the like projected to be the new boon for marketers,  this appears to be a very smooth move on Google’s part.

Google announced on their blog:

We’re happy to announce today that we have signed an agreement to acquire AdMob, a mobile display advertising company based in San Mateo, CA. AdMob is a great Silicon Valley story — founded in 2006 by Omar Hamoui when he couldn’t find good ways to generate traffic for his mobile site. Over the past few years, Omar and his talented team have built a thriving company with great mobile advertising products, and we are looking forward to having them join the Google team and work with us on the future of mobile advertising.

The acquisition was for a mere $750 million but is probably one of the smartest deals out there. Analysts predict that growth in mobile advertising will range from $1.2 billion to $13 billion per year by 2013.Mobile advertising is in its infancy now with an estimated worth of  $400 million a year. This is just a small fraction of what is spent on online advertising.

Google adds that:

Mobile advertising is a rapidly growing and competitive space, and Google and AdMob are currently specializing in different areas. Though Google offers many forms of mobile advertising, its focus to date has been on mobile search ads, while AdMob’s focus has been mobile display ads and in-application ads.

Google further contends that:

The deal will bring new innovation and competition to mobile advertising, and will lead to more effective tools for creating, serving, and analyzing emerging mobile ads formats.

This deal will benefit developers, publishers, and advertisers by improving the performance of mobile advertising, and will provide users with more free or low-cost mobile apps.

The mobile advertising space will remain highly competitive, with more than a dozen mobile ad networks. The deal is similar to mobile advertising acquisitions that AOL, Microsoft, and Yahoo have made in the past two years.

Here is a graphic posted by Google to demonstrate the types of mobile ads:
align=”aligncenter” width=”578″ caption=”Types of Mobile Ads”]

Let’s see if Yahoo, Microsoft and the like can catch up to this.