Speculation on Purchase of Admob by Google
On November 9th, Google Inc. announced that it will be buying Admob Inc., a provider of mobile ad technologies, for $750 Million. Such a move would undoubtably expand sales of ads that appear in applications used on smartphones such as the Iphone, which now has more than 100,000 applications.
Eric Schmidt, CEO of Google Inc. said, “AdMob is clearly the best of its ilk for applications monetization. We think that’s as strategic as search monetization, which, of course, we’re very good at.”
Many analysts are comparing this purchase to that of Double Click, bought last year for $3.2 Billion by Google Inc. “To us, AdMob looks in some ways to be a DoubleClick for the mobile Web,” broadpoint.AMTech analyst Ben Schachter said. “It should help not only to provide more relationships with mobile ad publishers and buyers, but also to provide a tested technology platform for monetization of mobile inventory and the delivery, tracking, and reporting of mobile ad campaigns.”
Karsten Weide, analyst with IDC in California speculates that combined, AdMob and Google will be the largest mobile- advertising company, with about 30 percent to 40 percent of the market.
Advertising on mobile phones is a great generator of revenue,however there is speculation over why this purchase is taking place. It might go unnoticed by some that Google now has access to usage data of many of the most popular mobile applications, mainly the applications available in the iTunes App Store.
Google will be able to know more details than ever before about how people are using iPhone apps, how they are using advertising within those apps, as well as users’ allegiance to those apps.
Until there is enough mobile display advertising to sell to give rise to healthy-enough earnings ,it may likely be the access to the data that leads to the biggest return on Google’s investment.