So why is Google buying AdMob?

Google Buys AdMob

Google are about take a huge step towards acquiring a much larger stake in the mobile ad marketplace by purchasing mobile ad firm AdMob for a reported $750 million.

If approved, the acquisition would provide Google with a key set of technologies to expand its advertising business beyond search-related text ads that make up the bulk of revenue. "Google could have built this itself, but this gives them a head start," mobile analyst Greg Sterling of Sterling Market Intelligence told BusinessWeek.

He added, "It will thrust Google into the forefront of mobile display ads."

Founded in 2006, AdMob is a mobile ad network focused on selling and serving display ads on mobile browsers. But recently, much of its revenue has come from mobile apps, an area Google are keen to penetrate further due to Apple's domination of the sector.

In a recent interview with ClickZ.com, AdMob's North America General Manager Jason Spero said apps on Google's Android platform had recently begun to "surge in the company's ad traffic reports."

Google have vowed to pursue a more aggressive merger path

Google hope the deal will help improve audience and campaign targeting and tracking while developing more powerful optimization and publisher-side monetization tools.

In a statement, Susan Wojcicki, Google's VP of product management said: "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."

The $750 million deal would be the company's third largest behind its acquisitions of YouTube and DoubleClick. And now, after initially scaling back M&A efforts in the face of the economic downturn, Google have vowed to pursue a more aggressive merger path for 2010 onwards.

After reporting good profits despite the recession and now shelling out $750 million dollars for an ad firm, Google are continuing to prove themselves a real force of nature. Anyone else feel sorry for the guys down at Yahoo and Microsoft?

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