Google is buying mobile ad startup AdMob for $750 million. This is Google’s largest acquisition after its $3.1 billion purchase of DoubleClick in March, 2008. This is also the third-largest ever after the $1.65 billion YouTube acquisition in 2006.

Google wants to do with mobile Web advertising like it is dominating search advertising and AdMob has a strong foothold in it. AdMob has built a business what is approaching a $100 million business in three years. AdMob splits its revenues 60/40 with publishers, and so gets $40 million of that $100 million gross.

Google is more attracted towards the fact that the growth potential of mobile advertising from here on is exponential. Google is hopeful towards a broader adoption of mobile phones with Android, and sees a big jump in mobile searches across all Web phones. Even though search will probably make up the majority of mobile ad revenues, Google wants to keep control of mobile display ads as well.

With the rise of the iPhone, and now Android, more mobile apps and more mobile Web browsing is happening today which is creating more mobile ad inventory for AdMob to fill.

In September only about 10.2 billion ad requests were served by AdMob across 15,000 mobile Web sites and apps. About 28 percent of those came from iPhones and iPod Touches and 7 percent from Android. In smartphones, Apple devices had a share of 48 percent of ad requests, and Android with a 17 percent share.

As the mobile ads are taking off the ground,, Google wants to get into the game. With AdMob, it is not only buying a popular consumer destination but also a future source of revenues. Google will be able take AdMob’s revenue to another level by combining it with its existing AdWords and DoubleClick systems and exposing it to the hundreds of thousands of advertisers who might like to add mobile display ads to their campaigns.

Related posts