Google tightened its grip on digital advertising with a push deeper into the mobile world on Monday as it agreed to buy AdMob, the largest mobile advertising network, for $750m in stock.
The deal will give the search company a big foothold in the fastest-growing part of the online advertising business. It will be able to combine its own search ads with AdMob’s network for serving, or delivering, display ads on mobile web pages and in applications that run on mobile phones.
Mobile advertising has risen strongly on the back of the iPhone and the generation of smartphones it has fostered, including those powered by Google’s Android software.
AdMob delivered 10.2bn mobile messages a month in September, more than double the number a year before, according to its own figures.
Digital advertising experts said Google’s timing looked better than that of rivals such as Microsoft and AOL, which mounted mobile acquisitions two years ago.
“Everyone expected it to happen a bit faster,” said Jonathan Nelson, chief executive of Omnicom Digital. Google’s move was likely to hasten development of the mobile ad market, he said.
The deal echoes Google’s purchase two years ago of DoubleClick, which dominates the delivery of targeted ads to internet users, based on data about their behaviour collected from cookies. Admob says it targets ads based on factors such as a mobile user’s age, sex and ethnicity.
The DoubleClick deal drew complaints from privacy campaigners and prompted an extended antitrust review from the Department of Justice, though some observers yesterday said a similar reaction to the AdMob deal was unlikely.
“It’s not DoubleClick all over again,” said Jeff Chester, a privacy advocate in Washington. European regulators were likely to consider the impact of the deal as part of their review of the privacy implications of online advertising, he added.
“We’re very careful not to keep personally identifiable information,” said Omar Hamoui, AdMob’s founder.
Mr Hamoui, a mobile internet developer, founded AdMob in Silicon Valley three years ago. The sale is a payday for investors who have put nearly $50m into his company, including three of the valley’s best-known venture capital firms, Sequoia Capital, Accel Partners and Draper Fisher Jurvetson.
Mr Hamoui has managed to outrun Google itself, which tried to muscle into the market with a service two years ago. His early success was founded on creating a targeted advertising service not dependent on mobile network operators, and seeing that mobile advertising was likely to shift quickly to the apps that run on the iPhone and other new handsets.
