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Summary:

Mobile ad network Millennial Media has filed to go public as it looks to capitalize on the big shift in advertising toward mobile devices, a market that is expected to grow rapidly in the coming years as smartphones and tablets proliferate.

Millennial-Media

Millennial Media, the largest independent mobile ad network in the U.S., has filed to go public to raise a maximum of $75 million. The company is looking to capitalize on the big shift in advertising toward mobile devices, a market that is expected to grow rapidly in the coming years as smartphones and tablets proliferate.

Millennial’s platform serves up 40 billion ad impressions per month and reaches 200 million people worldwide through more than 28,000 apps that use Millennial’s network. IDC said last month that it has 16.7 percent market share in the U.S. behind only Google and ahead of Apple.

The company in the last nine months of 2011 generated $69.1 million in revenue, up from $29.1 million for the same period in 2010. It narrowed its net loss from $5.4 million to $417,000 over the same period while adjusted earnings before interest, taxes, depreciation, and amortization improved from a loss of $4.9 million to earnings of $650,000.

Millennial is poised to become a major player in mobile advertising, which is expected to grow to $20.6 billion in 2015 worldwide, according to Gartner. The company has a bigger opportunity as it expands internationally. Only 10 percent of its revenue comes from overseas markets.

To date, the Baltimore company has raised $65 million from Bessemer Venture Partners, Charles River Ventures, Columbia Capital and New Enterprise Associates. There were reports in 2010 that Research in Motion was interested in buying up Millennial, but the talks apparently broke down over the value of Millennial. The company is now poised to be an even stronger independent challenger to Google and Apple and can also put more distance between it and a gaggle of over other smaller competitors.

But the company has incurred losses since it was founded and it said it doesn’t know when it will achieve profitability. And Millennial acknowledged that even after going public, it may still struggle against bigger rivals. A lot will also depend on continuing to win over developers and on international expansion, which opens up opportunities but more risks as well. But having extra capital will also help Millennial acquire smaller companies and build up its marketshare.

As I’ve mentioned before, mobile advertising has a big upside because the devices they appear on are very personal and can use a lot of different signals to deliver very targeted advertisements to users at any time, no matter where they are. Mobile advertising is still small compared to display advertising but it’s going to be big as the world increasingly goes mobile.

  1. Here are my 5 big takeaways from Millenial’s IPO filing: http://www.gordonbowman.com/millenial-medias-ipo-filing-5-big-takeaways

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