Google picks up AdMob for $750 million; Targets mobile display ads

Google said that it will acquire mobile advertising company AdMob in a deal valued at $750 million in stock.
Written by Larry Dignan, Contributor

Google said Monday that it will acquire mobile advertising company AdMob in a deal valued at $750 million in stock.

The search giant said the purchase will "enhance Google's existing expertise and technology in mobile advertising." See Google blog and statement.

With the move, Google is making a big bet on mobile display advertising. Google, which already occupies the market for mobile text ads, appears to be purchasing AdMob in an acquisition akin to its DoubleClick purchase. The message: Google wants to be a big display ad player on the Internet and mobile.

With AdMob, Google acquires a suite of mobile tools including an ad marketplace, analytics and metric tracking.

In a statement, Google Susan Wojcicki, vice president of product management, said AdMob has made "exceptional progress" in a short time in mobile advertising.

She added in a blog post:

Despite the tremendous growth in mobile usage and the substantial investment by many businesses in the space, the mobile web is still in its early stages. We believe that great mobile advertising products can encourage even more growth in the mobile ecosystem. That's what has us excited about this deal.

Google added that the purchase of AdMob will help it develop, serve, create and analyze mobile ads. The game plan with AdMob will hook up mobile display ads to Google's back-end infrastructure.

While Google gets some heft in a growing mobile market, AdMob needed a big brother too.

In a blog post, Omar Hamoui, CEO and founder of AdMob said:

We now operate in an environment that is much more advanced than the one we entered into a few years ago. There are literally hundreds of competitors, small and large, with different areas of focus and expertise. Lately, it seems that almost every week we hear about a new idea or company in the mobile advertising space. This has led to rapid innovation, and we're excited about the positive attention this deal will bring to mobile advertising. We have no doubt this will bring even more players into the space and accelerate all the innovation that is already taking place.

Indeed, it's highly likely that AdMob would have wound up competing with Google at some point. AdMob's master plan looks something like this:

It doesn't take a rocket scientist to figure out that Google is positioning itself in the same center of the ad universe. AdMob gets a nice payday, more resources and a big partner. Given the alternative---eventually being run over by Google---it's hard to turn down the deal.

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