Google To Acquire Mobile Ad Network AdMob For $750 Million In Stock

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Google (NSDQ: GOOG) has agreed to acquire AdMob, a mobile ad network, for $750 million in stock. Release.

At that jaw-dropping price, it marks Google’s third-largest acquisition after DoubleClick and YouTube and is a very solid exit for AdMob and its investors, which have pumped in $47 million into the business. But perhaps more importantly, the acquisition also lends credibility to the struggling mobile advertising space, which is always being characterized as being around the corner from taking off. In a blog post, Google’s VP of Product Management Susan Wojcicki writes: “Despite the tremendous growth in mobile usage and the substantial investment by many businesses in the space, the mobile web is still in its early stages. We believe that great mobile advertising products can encourage even more growth in the mobile ecosystem. That’s what has us excited about this deal.”

Google said both companies have approved the transaction, which is subject to customary closing conditions.

AdMob is considered one of the largest U.S. mobile ad networks, especially in terms of number of ad requests. However, it’s unknown how many requests the company fills and the figures are not independently verified. Over the past year or so, the San Mateo-based company has increasingly focused on serving ads to the iPhone, and even bought an ad network aggregator called Adwhirl that tries to fill requests from a number of competing ad networks. AdMob’s CEO Omar Hamoui, who founded the company in January 2006, writes a fairly personal letter here, in which he thanks everyone for their success and looks forward to the future. Hamoui: “The best part of all this is what’s next. We are not going away. After our deal with Google closes, we will work together to accelerate the pace of innovation in this area. Our product and engineering teams will keep building great products for all of our customers. Our business development team will keep working to maximize ad revenue for the more than 15,000 mobile Web sites and applications that make up AdMob’s publisher network. Our sales teams will keep working with our thousands advertisers to deliver successful campaigns and our marketing group will keep pushing to get the word out about mobile. It’s just that now we will be able to do an even better job for all of our customers.”

Google’s interest in AdMob is fairly obvious. The internet search giant has recently launched Android, its mobile operating system, but has made it clear that it intends to make money similarly to how it does online — through advertising. For some time, AdMob was an obvious acquisition target, but it will be important to watch if other ad networks will be picked up by Yahoo (NSDQ: YHOO) or Microsoft (NSDQ: MSFT) now that Google has jumped out in front. Other mobile ad network startups include: Millennial Media, Jumptap, Quattro Wireless, Mojiva and others.

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observer

commentgreat for admob; maybe good for google; very bad for publishers because admob’s almost non-existent transparency will get worse now that they are part of a monopoly…i predict that the publshers will see a 20% or higher drop in revenues

Brian Zimmerman

OMG, where are antitrust folks? Omar just got very rich on Google controlling WAY too much of digital advertising ecosystem. Unbelievable but not really…Eric Schmidt doesn't curry favor w/ Obama for no reason…

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