Google has just announced that it has acquired AdMob, the mobile ad platform that has been especially popular on the iPhone, for $750 million. This is a big win for the company’s early investors, which include Sequoia Capital and Accel Partners (this is a huge day for Accel — they were also investors in Playfish, which was just acquired by EA). More recent investors include DFJ and Northgate Capital.
AdMob founder Omar Hamoui sent the following letter to customers:
Today we announced that AdMob has signed a definitive agreement to be acquired by Google for $750 million. We are extremely excited about this new partnership and what it means for our advertiser, developer and publisher partners.
AdMob’s people, products and tools will continue to work to deliver successful campaigns for you and to effectively monetize your mobile traffic – no interruptions. Our product and engineering teams will keep building great products for our customers. Our sales team will keep working with our thousands of advertisers to deliver successful campaigns. 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.
After our deal closes, AdMob will work with Google to accelerate the pace of innovation in mobile and do an even better job for you. We believe this deal will benefit our advertisers, developers and publishers by:
*Increasing our investment in building innovative and engaging ad units across platforms and to further improve targeting and tracking.
*Building even more powerful relevance and optimization capabilities, and more powerful technology and tools to monetize mobile traffic.
*Increasing the effectiveness of display advertising on mobile devices by leveraging Google sales team, infrastructure and relationships.
*Improving the already high level of service and support we deliver to our advertisers, developers and publishers.
Google has written its own blog post announcing the deal, pointing out the dramatic increase they’ve seen in mobile search and app usage:
iPhone and Android users browse the Internet more often than anyone else [Morgan Stanley], contributing to Google’s 5x mobile search growth over the past two years
And a quarter of these same iPhone and Android users spend nearly 90 minutes per day using applications on their devices [AdMob]
Google has set up a website to explain the benefits of the AdMob acquisition, detailing the rapidly growing (and still very nascent) mobile advertising space. Google also created the graphic below to highlight the differences between its own mobile search ads, and the display ads AdMob shows in applications on the iPhone and other platforms.
This has been a big day for acquisitions. Earlier today we broke the story that Google is acquiring VoIP startup Gizmo5 for around $30 million in cash.
Lol, win!
Sequoia Capital has been ripping it lately.
Well, this is pretty cool. I didn’t have the slightest idea that the ads I were seeing on my iPhone came from one source. Admob is such a potential advertising firm that’s when shaked-lightly could produce an extremely big (ROI) Return of Investment to BIG G
Will Admob be The New Adsense for Mobile? http://bit.ly/a...ense-for-mobile
You gotta love the timing of Google – having a recent release of Android powered Phones then buying this mobile-advertising firm.
Well, this is pretty cool. I didn’t have the slightest idea that the ads I were seeing on my iPhone came from one source. Admob is such a potential advertising firm that’s when shaked-lightly could produce an extremely big (ROI) Return of Investment to BIG G
Will Admob be The New Adsense for Mobile? http://bit.ly/a...ense-for-mobile
You gotta love the timing of Google – having a recent release of Android powered Phones then buying this mobile-advertising firm.
Well, this is pretty cool. I didn’t have the slightest idea that the ads I were seeing on my iPhone came from one source. Admob is such a potential advertising firm that’s when shaked-lightly could produce an extremely big (ROI) Return of Investment to BIG G
Will Admob be The New Adsense for Mobile? http://bit.ly/a...ense-for-mobile
You gotta love the timing of Google – having a recent release of Android powered Phones then buying this mobile-advertising firm.
of the 4 ad types the sms ad is the best. legible information in a standard format. no click or scroll required.
“Google knows adsense and their search engine is not going to cut the mustard for next generation mobile consumption.”
the king of mobile context has yet to be throned.
Two in One day by Google
Very smart move!
That’s for sure. The little picture says it all. Wise move by google to continue its internet add domination with the new generation of mobile opportunities.
Wow I really need to buy some Google stock
This is great for Android. They should also buy Social Media. http://www.socialmedia.com/
Why AdMob worth $750 Millions? that’s a huge number.
Any one can explain it?
Probably just because of the potential of mobile advertising. Google really hasn’t done a great deal to tap into it yet and Admob has made huge inroads. It is basically the only mobile advertising method used by iPhone developers for example. If the mobile industry continues growing it will become a big source of ad revenue for Google
So should we expect to see Apple begin rejecting apps that use Admob? I am just not sure where Apple draws the line, so I will wait and see if they drop down the hammer of tyranny against Google and try and make their $750 million dollars of investment all for naught.
With Apple’s history of shady anti-competitive practice, I wouldn’t be surprised.
Apple is a bitch, but I don’t think they’d go that far. Plus most free iphone apps alreaddy use admob. They’d basically have to go through and delete every app in the store already. Do you really think they’d do that? You’re crazy.
but google already has adsense for mobile.
I don’t know the figures but from what I have read Admob has been much more successful. They are dominant on the main mobile platforms. I’m not sure about the web though.
I was under the impression that adsense was for mobile web pages – not native applications. Am I wrong?
$750m is a bargain. Admob has actual revenues and is operationally profitable. It is the single largest mobile ad network and totally dominates key segments like iphone, android and the US market.
They have comprehensively out-innovated Google with new ad units and have a great base of publishers and advertisers.
To be honest I’m surprised it didn’t go for $1bn, I expect falling CPCs, Click through rates might have allowed Google to push through a sale at this price.
android isnt a key segment, its an extremely small population of phones. thats how delusional you are fanboy
$750m is a bargain. Admob has actual revenues and is operationally profitable. It is the single largest mobile ad network and totally dominates key segments like iphone, android and the US market.
They have comprehensively out-innovated Google with new ad units and have a great base of publishers and advertisers.
To be honest I’m surprised it didn’t go for $1bn, I expect falling CPCs, Click through rates might have allowed Google to push through a sale at this price.
Fact: most clicks on mobile ads are by mistake. Also, think that as phones start to provide a closer-to-online experience (as the Iphone does) the need for specific mobile formats drops.
Overpaid!
Fact: Most apps that are in the top tier have CTR of 0.3% where the websites have CTR of over 1% with same ads. Tell me about “by mistake” on more time.
Don’t think that just because people don’t click on ads it isn’t being effective. A lot of people will see the ad over and over again and will type in the URL if they are interested. CTRs don’t tell the whole story.
to Vinod, since i cant reply directly, i will reply here. Admob ads or Mobile ads, or 300×50 ads for that matter, dont have enough room to include urls.
Great news for Admob, even better news for the other big adnetworks such as Admoda and Buzzcity.
WAY over valued though: 37,500,000 times turnover? All a play against Apple and a nice merry-go-round money deal between the VCs involved.
.com bubble here we go again.
A preemptive move on Bing. Admob was mostly CPC even tho google is spinning it as display.
Replay of Applied Semantics & adsense….
isn’t this becoming too much of an ad-monopoly? :S
+1
+1
Very very smart move!
That’s very interesting… for those of us in the online ad industry, it’s a pretty solid indicator that mobile ads are going to be a huge battle.
@Brant, it’s worth that much because, if you look at the types of mobile advertising, search ads – marked as Google’s focus – have shown to be ineffective in the mobile market. Companies like AdMob can actually show success on the mobile platforms.
Not to mention, they are generally the lone ad provider running in a particular place, rather than competing with other ad networks for a single clicker.
I’d have to say this is well worth the money Google is shelling out.
Incredible!
next up: salesforce
no way
Google has played it really smart by acquiring a competitor
smart….apple makes money on selling an app to me once, but google could make money off of that app every day if it is incorporating this tech.
one wonders if apple will just start kicking off apps that feed any money back to google…
Google always thinks ahead of others
The deal makes sense for both parties. Congrats AdMob!
But not so much for Apple
Apple? I didn’t think Apple was really part of the deal. I’m sure Google has no plans to slow down development for the iPhone. They have a vested interest in AdMob’s success in such a crucial market.
What the hell does Apple have to do this?
Agree! This is a great move, and somehow it seemed almost expected, except for the price that is…
When’s Google going to find another way to make money besides advertising?
Why do they need another way? http://ctrlalts...rnet-other.html
You mean like Google Apps Premiere, international phone calls, or Google Checkout?
Who knows. Is there a deadline?
Why would they? They makes tens of billions dollars from it every year, and it’s this source of revenue that lets them make ALL of their products free.
i thought you were talking about microsoft.
other than branded advertisers, not much there for performance-driven advertisers, so we’ll see how this fairs over time.
i for one never click on those ads, so i’m curious who does.
Very nice. Big congratulations to AdMob and Google.
Smart move on Google’s part since they would likely both compete with each other when GOOG launches mobile ads full bore. Hopefully they are nothing like the more annoying YouTube ads.
Another step closer to Skynet!
I agree with you. Also, I find Google ads extremely annoying in iPhone apps. The screen is small as it is and then just when you are trying to click on a small button an ad comes up! And bam! you are now on Safari.
That being said, I would rather try a free (limited) app and then buy it (if I like it…).
That’s just my opinion and I speak from my own experience. If anyone else thinks differently, i respect that.
This deal should be reviewed for anti-competitive reasons. Admob is the dominant player in the mobile ad landscape and coupling it with Google will only decrease the revenue share that existing mobile publishers see. This is a terrible deal for mobile publishers.
I agree with Mark, small publishers will loose big time
Google used to suggest a free “ad supported” phone service was in their pipeline.
http://www.busi...41/b4053084.htm
This purchase could take them a step closer to that goal -free phone service for users with more relevant targeted ads for advertisers.
It’s been a bit more than one year since Sequoia’s ‘RIP Good Times’ Presentation… so are we going to have a new bubble for those who have survived the past year?
imma let you finish, but cisco still does bigger acquisition
Ha!
WOW. This is great news for the mobile community.
99% of admob clicks are by mistake. what a joke.
true. the vast majority of mobile clicks are erroneous. but google has a lot of cash, so they wanted to acquire a leader in that space.
admob is primitive, technology-wise.
have any evidence or a study there to prove your comments on erroneous clicks?
btw@jb: how will a free ad supported phone service work? when you call 911 you hear and ad for ambulance chasing lawyers before your call gets through? or when your girlfriend calls you hear a tampax ad before she talks to you?
Obviously, ads for emergency #s wouldn’t be subject to ads. Even on prepaid phones if you don’t have any minutes you can still call 911.
They used to do this on promotional phone cards a while ago. When you want to make a call, you would dial the number, but before the call is connected you would have to listen to an ad before the call was connected. It’s really annoying and I could NEVER use it long term, however it is a good solution for people that wouldn’t be able to afford a cell phone otherwise – and maybe college students, and teenagers. There is a market for this, but not for the masses.
coooooooooooool but not cool. Now we are going back to google, i hate that for some reason.
Congrats to AdMob! With revenues of $20m, getting $750m is amazing. Great news for other ad-networks as well.
this is fucking great news. now lets see those admob fill rates jump from 50% and give me more than just 3 cents per click please!
Very interesting this move.
I actually still think that when we come to mobile advertising, the majority of the industry is just crossing the “chasm” (per Geoff Moore’s analogy) between early adopters and getting in the “early majority” when it comes to advertisers and their digital spend. This acquisition allows AdMob to not only bridge the chasm but further penetrate the “early majority” because of Google’s ad relationships.
I think it could potentially start what I call a 2nd round of mobile “musical chairs”, as other big media folks are going to start looking for acquisitions that give them mobile ad presence (but most likely at a lower price tag)
wow, a big day Accel, I wonder how much they’ve made in all today!
Hi,
I remember when Admob was still getting ready to launch and the founder was talking about his idea/company on MobileCrunch – From zero to $750m.
Google doesn’t need the technology to be perfect yet, they really do have more and cleverer people, but the greatest benefits will be the dynamics of the management and the market-share that’s been created, as they did with Double Click, it’s about the existing agreements and distributions that these ad-publishers have, where once a company has carved out a segment, they become an immovable incumbent that grows even if there’s better competitors (like the network-effect), as the market itself grows and then merging googles ad-products with the acquisition.
Kind regards,
Shakir Razak
Not surprising and certainly solid acquisition for them, but with the rise of social networking and social commerce, how much will traditional advertising matter? A few more thoughts here http://bit.ly/3WEfdN but would love to hear what others think.
Combine the two acquisitions and make free in and outbound calls possible from Google Voice.
I think it is a good deal for Google. They will rule the ads market on mobile internet as they are ruling the normal internet now.
Very nice although most iphone apps are on google adsense….so this would just expand there library.
guess I should have taken that fulltime job offer seriously
Wow 2 companies in one day, pretty crazy. Google is going on a shopping spree and I really hope it pays of for them. On another note Sequoia Capital and Accel Partners have been banking it like crazy lately! good for them, but I want a piece of the action
Must say I saw this coming. Wonder what it will do for the mobile ad space in Africa, seeing that Admob was only present in select African countries. Omar is sitting very very pretty!
great 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
The lucky ones who got in on Adsense for Apps Beta program saw a 200% increase in revenues, and this was a study. Now all that inventory will be rolling on AdMob and their reporting dashboard is flawless, better than AdSense, any day, which only means more optimization and higher revenues.
and the googlepire expands…
this annoys me i hadd a proposal for ads on mobiles over 4 years ago and never went a head with it haha
Once again Google is one step ahead of both Apple and Microsoft in acquiring a Company that leads the way in its particular sector.
If Apple and Microsoft had innovative plans in developing a lucrative Ad Platform across the Mobile Web, they should have both realized that as AdMob was like the Google AdSense of the Mobile Web World, they should have spent some of that huge cash mountain that they are both sitting on and acquired AdMob long before Google.
The Microsoft management seriously needs to become a lot more focused in trying to build a much more innovative roadmap for both the PC based Web and Mobile Web.
Just as Microsoft launches Bing and tries to integrate with Yahoo Search to compete with Google over the PC based Web Search & Advertising Platform, Google completely moves in another direction.
By laying down the foundations of another dominant Search & Advertising Platform within the Mobile Web Domain, Google is once again so far ahead of the game.
It doesn’t matter how powerful the iPhone or The Apps Store becomes in the near future, as Google will eventually acquire a piece of that pie from all of the AdMob clicks that will be performed on the Apple Mobile Web Platforms.
2010 is going to be a big year for the big three tech Companies, as they all try to acquire the most innovative Companies that work across all Mobile Web Platforms.
Who dares wins – Google?
You gotta love timing of Google having their Android OS powered phone release then the buying of Admob.
Will the 2k10 finally have an adsense in mobile in the form of ADMOB?
http://bit.ly/a...ense-for-mobile
Ces lavie
I am sure Microsoft must be worried as this clearly gives google a push for advertising especially with a successful launch of the Droid phone
http://thetechn...-aquires-admob/
$750 Mills is just an indication of a yet another bubble…Wuts gonna happen to all those bad clones of admob…
wow what a sales
chandan
http://www.dir.in
Very neat. I wonder how they will integrate AdMob into AdSense for iphones…
How much will the low level Admob employees make in this deal?
They have 140 employees.
Say 2/3 of 750M goes to VC.
that leaves 250M for the 140 employees
Say 40 employees are management / earliest employees so they take 90% of 250M = 225M
So the remaining 100 non-management, non “early” employees get about 25M / 100 = $250K per non-management, non-early employee?
Does this math make any sense?
That’s roughly right but really hard to do back of envelope math like that. Employee option grants are intensely personal for each employee. But here’s a rough breakdown of comp ranges look for employees (as % of total company ownership).
Founder CEO – 5-7%+ (in AdMob’s case, may be up to 10-15%)
New CEO hire – N/A in this case
VPs – ~1-2% (negotiated)
Non-titled employees – rounding errors.
Early employees can sometimes hold some more of the company but usually no more than 2-3%. VCs hate dealing with more than a handful of folks that can block a deal or be a headache in a drag-along clause. Employees RARELY hold more than 15-20% of the company in a great situation.
Again this is all conjecture. But I would highly doubt anyone past the top 10-12 people is going to be retiring anytime soon. And most of them will be out of work soon after they are absorbed into the GOOG. Consider it a nice severance package.
Apple had a bid of $500m in and 30-day exclusivity. They didn’t close in time and AdMob went with Google….
Rumors said that AdMob was on a $70m/annual run rate. Can anybody confirm this?