Thursday, January 7, 2010

The Mobile Advertising Industry Is Worth At Least $1 Billion Now

Following Google’s purchase of AdMob and news that Apple is buying Quattro Wireless, the mobile advertising industry has passed the $1 billion in value—which is quite the accomplishment given that the total U.S. mobile advertising market was only worth $416 million in 2009. In 2010, the U.S. market will equal about half, or $593 million, of what Google (NSDQ: GOOG) and Apple (NSDQ: AAPL) just spent, according to eMarketer.


The $1 billion-dollar figure comes from adding the $750 million Google paid for AdMob, and the rumored $270 million Apple paid for Quattro. To be fair, both Google and Apple are not just looking at the immediate revenue opportunity, but rather the total future value, so it’s not correct to compare the purchase prices to one year of revenues, but it works as a point of comparison.


The billion-dollar figure is also something for other startups in the space to salivate over because it has created a high valuation for companies in the space. Yesterday, when the news leaked out that Apple was sniffing around Quattro, the rumor mill accelerated with those crossing their fingers that the $270-something figure was correct. And today, a number of mobile ad networks provided glowing statements about how the two deals validate the space. AdMob stated: “We believe that Apple’s proposed acquisition of Quattro serves as yet another validation of the vibrant mobile advertising industry and can help accelerate the pace of innovation and competition in this space.” And, Jumptap’s CMO Paran Johar took it a step further: “If there is any doubt that 2010 is the year of Mobile Advertising, Apple just cleared up any speculation. For pessimists who thought the Google acquisition of Admob was a fluke, this reinforces that mobile advertising is here to stay.”


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