Google may have its fingers in a lot of pots when it comes to digital advertising, but to date, it has not replicated its runaway success in search. While the company may be late to market with its online display advertising play, Google is not risking the same fate in mobile.
From the Android to mobile search, Google has been making plays there for months. And with today's acquisition of AdMob, the search giant will have more of its bases covered in that market.
Google has already built its own platform for AdSense on Mobile devices, but this $750 million acquisition opens up mobile display for Google. AdMob has access to more than 15,000 mobile Web sites and applications.
Google’s engineering VP Vic Gundotra, may have said this fall that “We believe the web has won and over the next several years, the browser, for economic reasons almost, will become the platform that matters and certainly that’s where Google is investing.” But today's acquisition and Google's recent history prove that the company is much more interested in laying the ground work for whatever mobile sector explodes revenue.
AdMob may be a small digital player, but it has established itself in the mobile space, and is growing quickly. In August the company served its 100 billionth mobile ad. According to VentureBeat's Matt Marshall, the company was bringing in over $40 million a year and a half ago, just 18 months after it launched.
While Google may be focusing its mobile device around its self-generated Chrome OS, the company is device agnostic when it comes to serving and profiting from advertising.
On the Google blog today, the company wrote:
"Though Google offers many forms of mobile advertising, its focus to date has been on mobile search ads, while AdMob's focus has been mobile display ads and in-application ads."
And a big part of that focus has brought in money from Apple products. AdMob received 2.6 billion ad requests from iPhone and iPod touch devices in September, up from 130 million in September of last year.
Google is obviously working to create its own platforms that will bring in some of the burgeoning mobile market. (Kelsey Group projects the U.S. mobile ad market will reach $3.1 billion in 2013, up from $160 million last year.) And while it may be nice to say "the web has won," it's clear that consumers have yet to make up their minds on where their money is going in mobile. On the iPhone, downloadable apps are still a highly profitable niche — one where AdMob has done very well serving ads. And while Google may be at work developing a better browser and phone that could eat Apple's lunch, that doesn't mean it can't cover its bases to profit from existing platforms and apps that are bringing in money now.
And when you're as big as Google, why develop new technology when you can just buy a company that specializes in what you're after?