Google to acquire AdMob for $750 million in stock

News hot off the wires is that Google is about to purchase the leading mobile ads vendor (besides Google itself), Admob .

Admob is a mobile advertising vendor most popular in mobile applications like those on the iPhone and Android platforms.  The all-stock deal would value the transaction at $750 million.

Admob advertises that it has served up  125,421,940,162 ads to date (and counting). Google likely serves many more mobile ads via its Adsense advertising on Webpages and its fledgling mobile ads platform.  The deal would cement Google as the market leader in mobile advertising.

Admob's platform was built to help developers of mobile applications to get revenue. Developers can sell their apps for free and recover the costs of development (and turn a handy profit over time) using the Admob software.  While it doesn't give the same upfront revenue, many developers are finding that, over time, the advertising model pays more than the upfront sale.

Omar Hamoui, Admob's founder, started AdMob in January 2006 while in the MBA program at the Wharton School at the University of Pennsylvania. He said that everyone knew mobile was the future, but the future never came - or  "Mobile is the future, and always will be."

That is, until recently when Apple's iPhone took off.  

Then came the iPhone. Suddenly, Apple solved so many problems that had plagued mobile for so long. They showed all of us the way forward and their efforts have led to a landslide of rapid improvements in our space. We were so excited by the promise the iPhone represented that we shifted a significant portion of our attention to that device in its very early days. We launched the first iPhone ad units focused on the web and quickly added the capability to run ads in applications. Now with the addition of excellent devices from Palm, Nokia, RIM, and plethora of Android powered smartphones, we have all the preconditions necessary for what will be a tidal wave of mobile browsing and app usage. But let there be no mistake. Our business, and the mobile industry in general, owes Apple a debt of gratitude.

It will be interesting to see how fast the deal is finalized as Google is starting to get scary in terms of advertising marketshare.  Developers looking for alternatives to Adsense just lost one major player.

Copyright © 2009 IDG Communications, Inc.

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