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Google-AdMob acquisition 'a good fit'

Internet giant's purchase of mobile advertising firm will "bring benefits to both sides" but shouldn't be made exclusive on Android platform, say Ovum analyst.
Written by Liau Yun Qing, Contributor on

Google can strengthen its footprint in the mobile advertising space with its AdMob acquisition, an analyst says, but notes that the search giant should not apply the latter's technology only on its own Android platform.

Eden Zoller, principal analyst at advisory and consulting firm Ovum, said in a statement Wednesday the US$750 million AdMob deal announced earlier this week "should bring benefits to both sides". He explained that while Google is getting stronger in mobile search, it lacks a strong foothold in the mobile display advertising market where AdMob is already a significant player.

According to Zoller, AdMob was able to grow into one of the largest mobile advertising networks in the business because of its willingness to serve ads across a wide range of device platforms. This allows advertisers to reach the broadest base possible, he said.

Ovum reported that AdMob was one of the first companies to launch a dedicated business unit to handle ads for Apple's iPhone platform in July 2008, and another for Google's Android OS in February 2009.

Zoller said the acquisition is a good move for AdMob because the "barely out of startup mode" company will need resources and scale to compete with larger mobile advertising players, such as Microsoft and Nokia.

In a November BusinessWeek Online report, Google's head of corporate development David Lawee said the company's top priorities were search, advertising and mobile services. The AdMob acquisition fulfils in the last two categories.

In a separate statement also released Wednesday, Saverio Romeo, industry analyst at Frost & Sullivan, said AdMob's technology in mobile metrics, analytics, advertising and monetization solutions can "add value and power to Google's mobile advertising strategy".

"The Internet is becoming mobile and Google has to be where the Internet is and with tools that Google are familiar with," said Romeo. "Advertising is one of this and Google is moving the pieces in order to ride the wave of mobile Internet and mobile advertising when it becomes big."

Google's acquisition strategy is "not new", said Zoller, noting that the company bought DoubleClick in 2007 to strengthen its display advertising capabilities. However, the analyst said Google will need to carefully integrate AdMob into its "sprawling business".

Pointing to the launch of Google Adsense in June "to improve its push into mobile display ads", he added that Google should not turn AdMob into an Android-only advertising vehicle.

In February, Google retired its Adword business page for mobile ads, which had allowed users to create ads for lower-end WAP mobile devices and host them for free. The company said it was "no longer supporting mobile WAP business pages, but will continue focusing on marketing opportunities on the mobile platform".

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