Taking into account the admob and gizmo acquisitions, I cant help but admire google's acquisition strategy. Yes, they have made several acquisitions (dodgeball,jaiku etc.) only to shelve them later, but a lot of their acquisitions (doubleclick, analytics, admob) etc. are super strategic moves - compare this to yahoo's approach over the last few years, which acquired so many startups only to deadpool or offload majority of them.
Completely agree. Dodgeball/Jaiku and the likes are sooooper tiny compared to the ones that google has gotten right(YouTube/Urchin/doubleclick). Yahoo can learn leaps from them. I don't think enough can be said about how good Google's acquisition strategy is.
Makes perfect sense. A year and a half ago Eric Schmidt said this: Schmidt cited the iPhone as the first mobile device with a good web browser and that more devices will come to market, enabling advertising to become personal, during an interview with the Frankfurter Allgemeine Zeitung.
The CEO predicted that within a few years, mobile advertising would generate more revenue than advertising on today’s web.
P.S. I wrote about this last week, speculating that the Android platform is really about expanding the mobile search ad inventory. http://news.ycombinator.com/item?id=922429
The opportunity cost would likely be much more than $750 million. Google isn't a nimble, agile startup. AdMob is already a key player in this market[1] serving display ads in apps as well as sites.
[1] Given analysts use AdMob metrics to figure out market shares of various mobile phones
They did. Google's been running mobile ads (first in Japan, then worldwide) since 2006. But AdMob just plain does it better -- nicer interface and significantly higher CPMs for publishers.
I'm sure they also wanted the talent. I've met one or two of the AdMob guys and they seem pretty sharp.
Seems like google could have used some of that 750M to operate at a loss, pay out higher CPMs and attract publishers. It also seems like google could have, in theory, copied their interface or even improved on it. Could it be that google's now too big to make those kind of adjustments once it builds the momentum?
The talent angle of course makes sense, they are both pulling in top tier employees and removing top tier competition.
scenario a:
operate at a loss for a while, maybe achieve target (but maybe not), draw the ire of regulators for anticompetitive behavior
scenario b:
spend cash you can easily afford, have an immediate cash flow return, get a solution that is known to work, eliminate competitive threat without pissing off anyone in the process while ingesting talent at the same time
it's fairly easy to see why GOOG chose the latter option.
Bingo. In order to beat admob you have to move their advertisers to your system (may be easy) and try to get app developers to run your ads instead of Admob's ads (hard).
It's a bit of a chicken-and-egg scenario (devs will not move until the advertisers are there, etc.) and much easier to just buy them outright.
I predict for AdMob's eCPMs for November to drop sharply against their numbers for October based solely on their yanking of the IQ quiz SMS subscription offers (although they do still run some SMS-billing ringtone offers, so their numbers might not fall too fast). Those types of offers, while perhaps morally challenged, subsidize a tremendous amount of free content and services for the rest of us that have enough common sense not to click on them.
The whole mobile advertising market is probably not much bigger than this, but it's growing, and AdMob is the clear leader. I suspect AdMob would be worth a lot more than this in a couple of years if left to its own devices, which is the bet Google is making.