Less than a week after winning the blessing of antitrust authorities, Google has closed its $750 million acquisition of the mobile ad network AdMob, giving the search giant pole position in the emerging wireless advertising space.
"It's clear that mobile advertising is becoming a much larger part of our clients' and partners' strategies and with this acquisition, it's now a central part of our own business," Susan Wojcicki, Google's (NASDAQ: GOOG) vice president of product management, said in a blog post.
Now that the papers are in order, Google is beginning the work of integrating the companies' personnel and platforms, offering mobile marketers the assurance of a smooth transition and more specific product announcements in the near future.
Google had a tough time selling the AdMob acquisition to antitrust officials at the Federal Trade Commission, who worried that it would extend the company's dominance in the digital advertising space and took a long look at the transaction. Ultimately, and largely aided by rival Apple's (NASDAQ: AAPL) subsequent acquisition of the mobile ad firm Quattro Wireless and launch of its own iAd advertising platform, the FTC commissioners unanimously voted to close the investigation.
Google had argued that the mobile advertising market is highly competitive and evolving rapidly, and that AdMob is only one of a growing number of mobile ad networks competing for marketers' advertising dollars.
AdMob was of particular interest to Google both for its reach and its innovation in new ad formats, such as units placed within third-party applications. Google's Android platform is actively courting developers as it looks to narrow the application gap with Apple's iPhone, its chief rival in the smartphone sector.
Mobile Ads On The Rise
Wojcicki had high praise for AdMob's work in developing interactive and rich-media ad formats for applications, but she said that search remains the order of the day for mobile marketers.
In the past two years, Google has seen a more than fivefold increase in its mobile search queries, and it's only picking up steam, she said. In the first quarter of this year, smartphone users with full WebKit browsers submitted 62 percent more search queries than they did in the fourth quarter of 2009. Innovations such as the click-to-call feature found in many mobile search ads make the format more compelling for users, who often use their smartphones to search for local businesses while on the go.
"With many more advances to come, search advertising will remain the central way that many businesses connect with consumers on mobile devices," Wojcicki said.
Google executives have talked often of the enormous opportunity of the mobile ad platform as smartphones take on more of the functions of notebooks and desktops. Eric Schmidt, the company's CEO, has predicted that mobile ad revenues will eventually eclipse ad sales from the traditional Web on the company's balance sheet.
The narrative that Google is presenting to marketers holds that mobile is no longer an experimental medium, but rather an engaging digital platform that is attracting increasing levels of consumers' attention and deserves a proportional slice of the media mix.
Surveys such as the one released yesterday by ABI Research help bolster that argument. The firm found that of mobile users who had visited a website on their handheld device, 27 percent said they had clicked on a banner ad or text link, up from 21 percent in a similar survey 14 months earlier.
"Every day, more marketers are looking to take advantage of the mobile-specific capabilities, extended reach, great returns and value that mobile advertising provides," Wojcicki said. "Advertisers are now starting to see mobile as an essential part of their overall campaigns, not just a siloed experiment on the side."
Kenneth Corbin is an associate editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.
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