Monday, November 9, 2009

Google Acquires AdMob for $750 Million

Google (GOOG) just made a big bet on Mobile advertising by acquiring mobile ad network AdMob for $750 million in stock. This deal is not surprising: Google has always been pegged as AdMob's most likely acquirer. Google explains the deal in more detail here.

While Google already has its own fledgling mobile advertising business, especially focused on search advertising, AdMob has taken an early lead with display advertising on smartphone platforms, such as Apple's iPhone and even Google's Android. AdMob received 2.6 billion ad requests from iPhone and iPod touch devices in September, up from 130 million in September '08. (It received 10.2 billion total requests in September.)

Bigger picture: Mobile advertising is still tiny compared to Internet advertising but companies like Google are obviously hoping it can be a growth driver. Kelsey Group projects the U.S. mobile ad market will reach $3.1 billion in 2013, up from $160 million in 2008.

The deal comes as AdMob was rumored to be seeking new funding ahead of an IPO in about a year. The purchase price is a solid return for AdMob's investors, including Sequoia Capital, Accel, and the DFJ Growth Fund. AdMob had raised about $50 million.