January 5, 2010 7:10 pm

Apple buys mobile ad group Quattro Wireless

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Apple has opened another front in its growing
war with Google by purchasing Quattro Wireless, a mobile advertising company, for a reported $275m.

The acquisition highlights the degree to which both Apple and Google are focusing their attention on smartphones and mobile internet.

Google revealed its Nexus One mobile handset that it hopes will compete with Apple’s iPhone.

The purchase of Quattro pushes Apple into the world of advertising for the first time and follows a similar move by Google.

In November, Google bought AdMob, the largest mobile advertising network, for $750m in stock. Apple was reportedly also pursuing AdMob. That deal is now under scrutiny by the Federal Trade Commission for possible antitrust violations.

“Adoption of smartphones and the mobile internet has been tremendous, exceeding everyone’s best expectations,” said Julie Ask, a mobile marketing analyst with Forrester Research.

As a result, both companies are scrambling to be well positioned for what is likely to be another year of high growth for the market.

As more people access the internet from their mobile phones, mobile advertising has become the fastest-growing part of the display ad industry.

In the US last year, $320m was spent on mobile display and search ads, an 80 per cent jump from 2008, according to Imran Khan, analyst at JPMorgan. Quattro works with large brands to get their ads on the screens of smartphones including the iPhone and those running Google’s Android operating system.

Apple would probably use Quattro as a selling point to attract developers who make applications for the iPhone and iPod touch, said Ms Ask. “Most apps are free, so many developers make money from ad revenues,” she said.

“With Quattro, Apple can better enable their app providers to generate revenue through advertising.”

But Ms Ask warned that Quattro could be an odd fit for a company that has thus far specialised in making hardware and software. “It’s not the most obvious match.” Apple was “not traditionally an advertising company”.

Quattro will continue to operate as usual for the time being.

Andrew Miller, chief executive and co-founder, will assume the title of vice-president of mobile advertising for Apple.

“We have built our business by enabling advertisers to reach the right consumers across the mobile web and in applications,” said Mr Miller.

“We remain focused on delivering more engaging, relevant and useful ads to mobile devices, and improving the measurement and execution of digital campaigns,” he added.

Apple did not respond to requests for comment.

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