Boston’s Mobile Startups React to Google’s $750M AdMob Purchase

11/9/09Follow @wroush

I was at the offices of uLocate, a Boston startup with a suite of location-aware information services for mobile phones, when I heard today’s news about Google’s $750 million acquisition of San Mateo, CA-based AdMob, which runs one of the largest mobile advertising networks. “It’s a very good thing,” commented Walt Doyle, uLocate’s CEO, who was clearly impressed by the figures involved. “It’s a very good thing that Google, or any company, is willing to pay close to a billion dollars for a company involved in mobile.”

And that’s the dominant message today from the mobile companies around Boston that I’ve reached about the AdMob deal. No one’s fretting (publicly, anyway) that a Google-AdMob combination will overrun the still-fragile market for mobile advertising, or that there’s one less exit path for other startups, now that Google has already bought itself a mobile ad network. Instead, the consensus in the company’s public statements is that Google’s move offers an important boost for the whole mobile media industry.

“We actually think it’s great for the industry, because it really shows the importance of the mobile advertising market, and how important it is for advertisers and publishers to have access to mobile specialists who know how to make the most of that medium,” says Lynn Tornabene, chief marketing officer at Waltham, MA-based Quattro Wireless. Quattra presents itself, of course, as one of these specialists—it works with major brands such as Ford, Netflix, Procter & Gamble, and Visa to get their ads into the most advantageous mobile venues.

“Google is a sophisticated company with deep resources, and yet they really saw the need to acquire a specialist to gain traction in the space,” Tornabene says. “So that really validates the business model of all the mobile ad networks.” (By the way, when it comes to Google, Tornabene knows what she’s talking about—she used to be head of communications for Google’s DoubleClick division.)

That word “validates” came up a lot today. “The announcement is causing tremendous excitement as it validates the enormous potential of mobile advertising,” says Paran Johar, chief marketing officer at Jumptap, a Cambridge, MA-based provider of targeted mobile ads. “We predicted consolidation in the industry and Admob’s broad high volume business model is highly synergistic for Google.”

The $750 million price tag—making Admob Google’s third largest purchase ever, after the $3.1 billion deal to buy DoubleClick and the $1.65 billion purchase of YouTube—surprised some observers today, including me. (AdMob had raised some $46 million in financing since its founding in 2006 from Silicon Valley venture firms Accel, DFJ Growth Fund, Northgate, and Sequoia Capital, which makes the Google acquisition an extremely lucrative exit by current venture standards.) The odd thing, to me, was that … Next Page »

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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  • http://friendfeed.com/benenhaleybrian Brian Benenhaley

    With the fast growth of the mobile industry I am sure that this is just one of the next major moves Google is going to make.