In yet another indication of growth in the mobile phone industry, and smartphones in particular, Google announced the acquisition of AdMob on November 11, 2009. The $750 million price tag sends a clear signal that Google intends to be just as serious about search and advertising in the mobile space as they are on PC. Google has always been the likely suitor for AdMob so the acquisition represents more of a milestone for mobile advertising than a surprise.
Mobile and search advertising is still in its infancy. According to the Kelsey Group, search advertising was just 24% of the $160 million U.S. mobile advertising market last year. However, they project it will grow to 73% of a $3.1 billion mobile ad market in 2013. That's great news for Google if their foray into mobile search proves successful. Smartphone growth and usage patterns play a huge part of the business. Smartphones are expected to grown at roughly 5x the rate of feature phones (IDC, 2009) between now and 2013. In addition, users of smartphones tend to browse the Internet and do social networking for much longer periods of time than the average mobile phone user. The combination provides a solid business model for mobile advertising and Google clearly intends to have their fair share of the market.
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