The mobile internet
experience on mobile phones and PDAs has been improving rapidly, but
mobile web access still suffers from interoperability and usability
problems. Part of this is due to the small size of the screens of
used, as well as hardware limitations. Despite these problems, there
are now hundreds of millions of mobile internet users, resulting in a
fury of investment as companies seek to exploit this new market.
iPhone and Google Android users browse the internet more often
than anyone else, contributing to Google's 5x mobile search
advertising growth over the past two years. A quarter of those iPhone
and Android users spend nearly 90 minutes per day using applications
on their devices, according to Google.
AdMob was formed in
2006 to provide specialized advertising to the mobile web. Although
mobile ad spending is only estimated to reach $416 million in 2009,
mobile ad spending has been growing in excess of 30% annually. AdMob
has already partnered with hundreds of companies, including Ford,
Coca-Cola, Electronic Arts, Proctor & Gamble, and Paramount
Pictures. Their advertising platform has already served up over 125
billion impressions on the 15,000 mobile Web sites and applications
that make up their publisher network.
AdMob also has unique
data collection and data mining capabilities that Google may also be
"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 startup, generating impressive year on
year revenue growth, and we're excited to welcome this talented team
Regardless of the negative connotations of
advertising, it remains the primary source of income for content
providers who have eschewed the subscription-based business model.
Many app developers also rely on advertising revenues to provide
their apps for free.
"I think people underestimate how
important ads have been to funding the development of innovative
content on the internet. 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," said Omar Hamoui,
Founder and CEO of AdMob.
Google believes that this deal can
only help accelerate development of the mobile web. It plans to offer
mobile advertising to its massive advertiser base and rapidly
increasing the amount of advertising revenue available. They believe
this will offer a tremendous incentive to develop content and
applications, as they will know that they is an advertising base
there for them, allowing them to focus more on their users and less
on how to generate revenue.
"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," added Hamoui.
Google denies any attempt
to discourage competition, noting that AdMob is just one of more than
a dozen mobile ad networks in the U.S. that have proliferated in
recent years. AdMob's smaller competitors include Millenial, JumpTap,
and Quattro Wireless.
AOL acquired Third Screen Media in 2007
and runs it as the mobile ad subsidiary of its Advertising.com
network. Microsoft bought ScreenTonic in 2007 as well, while Yahoo
took over Actionality later that year as part of its mobile