It's RIM's move in the hunt for mobile ad network as competition heats up
Research in Motion, slipping in a market that it once dominated, appears to be playing catchup to rivals Apple and Google in the mobile ad game. The Wall Street Journal, citing unnamed sources, reports that RIM had been in talks with mobile ad network Millennial Media - but that those talks have broken down.
The issue, of course, is money, specifically how much of it RIM is willing to cough up for Millennial, which told the WSJ earlier this month that it has visions of an IPO. not an acquisition. Still, the company has reportedly asked for something in the neighborhood of $400 million to $500 million, a range that RIM thinks is too much.
Mobile ad networks are the latest grabs, with Google picking up AdMob for $750 million and Apple, which also had its eyes on Admob, snagging Quattro Wireless a couple of months later for an undisclosed amount. It's game on in the mobile ad business.
And Millennial Media certainly must know it.
Mobile advertising is in its infancy. Companies like Apple and Google are definitely in a position to influence what sort of path it will take, how it will look, how consumers will interact with it and so on. We're already getting a taste of the interactive elements of Apple's iAds but that's only the beginning of what's possible, especially once 4G and beyond come into play.
There's a lot to gain from being one of the pioneers of something new, such as mobile advertising. Certainly RIM knows it. And, again, so does Millennial.
RIM still dominates in smartphones but is seeing its market share slip. Sure, it has a game plan with Blackberry 6 and new devices to help it maintain its position and fend off Google and Apple. But so far, the plan isn't quite cutting it. In a post this week about sales of the Blackberry Torch, Larry Dignan wrote:
Wall Street analysts in recent days have been handicapping Torch sales. The verdict: Torch sales were solid but underwhelming overall. The Torch is the device that’s supposed to give RIM a kickstart, put the BlackBerry franchise in better position, and protect the smartphone maker’s market share. In other words, the Torch launch was ok, but not good enough.
So what's it going to be, RIM? Are you going to play ball with Millennial or are you going to keep shopping? It's no longer a game of software and hardware like it was in the old days. The money is in the apps and ads.
With every quarter that passes by, a growing number of customers - both on the enterprise and on the consumer levels - are buying iPhones and Android devices, running apps on them and soon, seeing ads, too.