Google buys Admob (mobile advertising)
Companies in Relationship
Initial Announcement Date:
Consideration: $681 million, consisting of 1.2 million Class A common shares + $26 million in cash (Source: Google 10-K)
Google plans to purchase mobile advertising start-up AdMob. AdMob sells ads that appear on Web sites geared for cellphones. The company was a first-mover in developing technology to deliver ads on Apple's iPhone as well as on devices that use Google's Android mobile operating system. J.P. Morgan has estimated AdMob's annual revenue at between $45 million and $60 million.
The deal is act two of Google's DoubleClick purchase in 2007 that blended search ad and display ad expertise. Google intends to meld AdMob's network of partners with its own mobile search ad initiatives.
Mobile advertising expenditures in the U.S. are projected to reach $600 million in 2010 and grow to $1.6 billion in 2013 (eMarketer). In contrast, online ad expenditures targeted at desktops/laptops are projected to be $25 billion in 2010, but grow more slowly to $33 billion in 2013.
May 2010 -- After a six-month investigation, the Federal Trade Commission approves Google's acquisition of AdMob. The commission states that its fears that Google would dominate the mobile advertising market were allayed by Apple's emergence as a competitor in this space. Apple appears to have done Google a big favor with its acquisition of Quattro Wireless.
The Admob acquisition has proved to be a critical component of Google’s impressive run rate in mobile revenue growth in 2011 (2.5x 2010) which is estimated to double in 2012. A major part of this growth has come from mobile ad revenue ($2.5 billion in 2011) on Android-powered phones.
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