» Google Buys AdMob

By John Gaffney

Consolidation. Excitement. Game-changer. Dominance. Welcome to the Google-ized world of mobile advertising. As the rest of the world was watching the company’s expected court filing on its digital book case, Google stepped out and bought AdMob for $750 million in stock. In the process, the landscape for mobile marketing is different than the one that existed Monday morning.

“This is the kind of game-changing event I’ve been predicting for more than a year,” says Jordan Greene, principal of mobile advisory firm Mella Media. “The entry of Google in a dramatic fashion makes this a whole different ecosphere.”

The details: Google buys AdMob for $750 million in stock. According to Google, the company is getting AdMob at a critical early stage of its growth, after it has proven its viability and customer base. “Mobile advertising has enormous potential as a marketing medium and while this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time,” said Susan Wojcicki, Vice President of Product Management at Google. AdMob stakeholders get a considerable payday from a company that could have become a fierce competitor within a year or less. “Our goal all along at AdMob has been to make it possible for developers and publishers to bring their products and ideas to mobile with the same business model,” said Omar Hamoui, Founder and CEO of AdMob. “We’re proud of the progress we’ve made towards accomplishing this goal, and joining Google will only accelerate this process, ultimately leading to very real benefits for end users around the world. As publishers and developers generate more revenue from their mobile products, they will invest more, and their mobile offerings will become richer, more creative and more robust.”

The Google statement used the word “ecosystem” frequently. “The deal will help Google in its efforts to develop more effective tools for creating, serving and analyzing emerging mobile ads formats. As this ecosystem continues to grow, the company expects these new marketing media,” it said. It promised the new venture would help advertisers engage mobile users with AdMob’s ad formats, help publishers and developers monetize their content more effectively, and help users will see more relevant ads and ultimately get access to more ad-supported content and applications – improving their mobile experience.

Greene and other experts brought up several short-term ramifications of the deal. First and foremost, it creates a new 800 pound gorilla on the mobile ad block. That’s undeniable and changes the ad pitch of every other company in this space immediately. The other point mentioned frequently is viability. Greene believes some brands that were on the fence about mobile ads and budgets might be more comfortable ramping up now that Google is pushing the market.

“The announcement is causing tremendous excitement as it validates the enormous potential of mobile advertising. We predicted consolidation in the industry and Admob’s broad high volume business model is highly synergistic for Google. The industry front runner will be determined by who can deliver the most advanced targeting capabilities for better ROI for advertisers and publishers,” said Paran Johar, CMO of Jumptap, which will now have to compete with the AdMob/Google combination.