One of the biggest acquisitions in the advertising and technology space over the past couple of years occurred this week Google recently purchased AdMob for $750 million in stock.
There has been considerable speculation about why Google not only purchased Admob, but spent so much money in doing so. The obvious off the cuff answer is to get their hooks into the mobile display advertising space by acquiring the most well-known mobile ad network. Some people such as Niki Scevak don’t think that’s a particularly good idea, and others such as Silicon Alley Insider seemed to have to work a bit to justify it.
While Niki makes some decent points about mobile advertising being tied to mobile commerce, and mobile commerce not being a huge market yet, I think the question I’d ask here is how will mobile commerce NOT become huge over the next few years? Mobile phone usage is skyrocketing and innovations such as the iPhone, Droid, and phones and software yet to be developed are going to keep that pace of innovation and change going. While I’m probably an early adopter, I’ve conducted numerous ecommerce transactions through my iPhone and in fact bought a book for my iPhone Kindle App just today. While I didn’t see an ad for this book on my phone, why couldn’t I have seen one that drove me to the purchase?
Regardless, I don’t think the mobile ad network is Google’s sole motive, and perhaps not even it’s strongest motive for the acquisition. I think John Battelle and Ian Schafer nailed this one by pointing out that the key asset for Google is the DATA.
This is data that will obviously help for ad targeting and the like, but getting iPhone app data (and other types of data) will be immensely valuable as Google attempts to take on Apple to own the mobile phone (software) market. The mobile data nut is just being brought to the table and is just now people are beginning to think about cracking it. It’s also worth pointing out some past Right Media colleagues of mine (Greg Yardley and Jesse Rohland) started Pinch Media a while back to handle mobile application analytics. This will be an interesting space to watch moving forward as mobile continues to grow.