Our take...
This is a great exit for AdMob and its investors, among which Accel Partners and Sequoia Capital. But it is also an outcome that is welcome by a whole industry seeking a permanent share of brands' media budgets.
With its iPhone ad units, AdMob was quick to acknowledge the importance of mobile applications and actual data usage on a specific platform rather than the sheer handset market share when it comes to displaying ads. It is therefore logical AdMob's efforts now expand to covering opportunities on Android and other smartphone platforms.
The deal is also Google's first acquisition in mobile advertising. Previous acquisitions in the mobile space focused on technology and software on the Android side of the equation, rather than its core advertising business.
Prior to the ad downturn, 2007 saw a handful of high profile mobile advertising acquisition including Enpocket (Nokia, September 2007), Third Screen Media (AOL, May 2007) and ScreenTonic (Microsoft, May 2007).
The AdMob deal is very likely to kick-start a new wave of consolidation, with companies such as Yahoo, Microsoft, AOL and top-tier operators (Telefonica, Vodafone, Orange among others) likely to make pre-emptive acquisitions.
For advertising start-ups, it will also be a strong call to action, as mobile now enters an era of scaling and integration with online campaigns. Companies such as Millenial Media, Quattro Wireless, JumpTap and Velti are likely to draw interest.