Google to Acquire AdMob for $750 Million | Hacker News Reader

Google to Acquire AdMob for $750 Million

finance.yahoo.com

82 pointsdwynings30 comments

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.

http://www.google.com/press/admob/index.html

And from the other direction: http://www.admob.com/google

it's interesting how google's page puts the price right in the first sentence, but it's nowhere in the admob notice.

Not sure, but it might be that as a public company, they have to release the price as it is public information anyway.

Google approved both notices.

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

I'd say any device running Opera was "the first mobile device with a good web browser".

So obviously I don't understand this market at all, can someone explain to me why google couldn't just copy ad-mob's business practices and features?

Admob has a lock-in on the iPhone ecosystem that's hard to break.

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.

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.

Its possible that operating at a loss would attract ire (because it really would be like the behavior Microsoft is/was so criticized for).

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.

won't this also draw concern from regulators?

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

Also, defensive. Consider the other big players - Google would prefer MS or Yahoo don't snap Admob up.

Google might be able to replicate the Adbob business but it would take time. Admob + Google's existing strength is a big head start.

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 price seems kind of steep for something that puts ads in iPhone apps. Isn't the whole iPhone app marketplace worth a lot less than 750 million?

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.

Eric Schmidt said at one point he thinks mobile advertising will be bigger than web advertising.

Nice exit. They had raised $47.2 million in prior rounds, so the multiples were still very healthy even on the last money in from DFJ.

This is a pretty impressive exit! I hope this is a sign of more liquidity in startup land.

IMHO what they bought is not the technology or the team. It's the title "Leader in mobile advertising". You can't have that when you are Google.

I wonder what this means for us Adwhirl users.

I thought Adwhirl was acquired by AdMob...do you mean if there is a potential divestment of Adwhirl?

> we will be releasing AdWhirl as an open source mediation solution

From a newsletter I received this morning.

Does admob have any significant competitors?

Reply on news.ycombinator.com