The Ad Network: Google Buys AdMob

On Tuesday, Google announced it would buy AdMob, the largest mobile advertising company, for seven hundred fifty million dollars in stock, and the deal was the loudest signal yet of where the money was moving. The phone was becoming the most important screen in the world, and the advertising was following the eyes. The deal came days after Apple bought its own mobile ad company, and the two purchases were the declaration of war. The deal is the November 2009 story, and the story is the lesson: the future belongs to whoever owns the pipes of the next platform.

The Ad Network is the subject of this article: what AdMob is, what Google is buying, what the deal says about mobile, and why the advertising wars moved to the pocket. The announcement came on Tuesday, November 9, and the industry spent the week redrawing its maps. The analysts wrote their notes, the competitors read the news, and the developers wondered what would change. This is the story of the acquisition, and the story is about the battle for the small screen.

1. The Deal

The deal was the confirmation of a courtship that the industry had watched for months. Google said it would acquire AdMob for seven hundred fifty million dollars in stock, and the price was the statement: mobile advertising was no longer a curiosity, mobile advertising was a market worth buying. The announcement came in a blog post, and the blog post was the thunder. The news spread through the industry in minutes, and the spreading was the speed of the story.

The deal was also the first big move in a new war. The same week, Apple had acquired Quattro Wireless, another mobile ad company, and the two deals together were the declaration. The two giants of the internet and the phone were both buying their way into the mobile ad market, and the buying was the race. The week was the turning point, and the turning point was the signal. The deal was the opening volley, and the volley was the signal. The money was the message, and the message was mobile.

2. The Company

The company was the leader, and the leader was the prize. AdMob had been founded in 2006, and in three years it had become the largest mobile advertising platform in the world, serving ads inside applications and on the mobile web. The company had raised money from the best venture firms, had grown fast, and had built the technology that matched ads to the small screen. The growth was the proof, and the proof was the value.

The company was also the distribution. AdMob's network reached thousands of applications and millions of phones, and the reach was the asset. The iPhone had become the center of its traffic, the report said, and the iPhone traffic was the hottest inventory in advertising. The developers trusted the network, the advertisers bought the inventory, and the trust was the business. The company was the leader of the market Google wanted to own, and the leadership was the value. The prize was not the software; the prize was the position.

3. The Market

The market was the future, and the future was the phone. The personal computer had been the center of advertising for a decade, and the center was shifting. The smartphones were multiplying, the applications were multiplying, and the time people spent on their phones was multiplying with them. The advertising followed the attention, and the attention was moving. The movement was the drift of the whole industry, and the drift was the direction.

The market was also the uncertainty. Mobile advertising was young, the formats were unproven, the click rates were low, and the skeptics said the money would never come. But the numbers were already arriving: the billions of ad requests, the rising budgets, the brands testing the new screen. The doubters pointed to the small revenue, and the believers pointed to the growth. The market was the bet, and the bet was the risk. The giants were buying in early, and the buying was the conviction. The uncertainty was the opportunity, and the opportunity was the race. The race was the reason the deal could not wait, and the waiting was the luxury no one had.

4. The Strategy

The strategy was the gap, and the gap was the threat. Google's advertising machine was built for the desktop, for the search box and the web page, and the machine had no engine for the phone. The search ads worked when the user typed at a keyboard, and the phone was a different world: smaller, touch driven, application centered. The gap was the weakness, and the weakness was the risk. The risk was the reason for the deal, and the reason was the urgency.

The strategy was also the fill. AdMob brought the mobile network, the relationships with the developers, the technology of the small screen, and the traffic of the applications. Google would plug the network into its advertising system and turn on the flow. The integration was the plan, and the plan was the machine: the same ads, the same advertisers, the same auction, on every screen. The advertisers would gain one place to buy, and the developers would gain one network to trust, and the gains were the story. The strategy was the integration, and the integration was the ambition. The gap was the hole, and the deal was the patch.

5. The Rival

The rival was Apple, and the rivalry was the context. The two companies had been dancing around each other for years, partners in the iPhone, competitors in everything else. The mobile ad market was the new arena, and the arena was the stage of the week. Apple had bought Quattro Wireless days before, and the purchase was the countermove. The timing was the dance, and the dance was the war.

The rivalry was also the chessboard. Apple controlled the iPhone, the store, the developers, and the payments, and the control was the fortress. Google controlled the web, the search, and now, with AdMob, the mobile ad network that reached across platforms. The two empires were building their walls, and the walls were the future. The battle would be fought on the screens of the phones, and the screens were the territory. The rival was the reason for the deal, and the reason was the race. The chessboard was set, and the pieces were moving.

6. The Developers

The developers were the fuel, and the fuel was the network. The application developers had built the mobile economy, and the developers needed money. The free applications, the games, the tools that everyone downloaded: the developers made them possible, and the advertising paid for them. AdMob was the bridge between the developers and the money, and the bridge was the asset. The bridge was the reason the network mattered, and the mattering was the value. The network counted the applications by the tens of thousands, and the counting was the scale of the prize.

The developers were also the loyalty. The deal could have frightened them, the fear that Google would favor its own interests, and the fear was the risk of the acquisition. Google's promises were the reassurance: the network would stay open, the developers would keep their tools, the advertising would keep flowing. The promises were the trust, and the trust was the currency. The developers were the community, and the community was the value. The fuel had to keep burning, and the burning was the test of the deal.

7. The Regulators

The regulators were the cloud, and the cloud was the uncertainty. The deal was large, the market was young, and the government would look at the combination. The reviews would ask the questions: would the deal concentrate the mobile ad market, would the competitors be squeezed, would the consumers pay more. The questions were the ritual of the big technology deals, and the ritual was the process. The lawyers would argue, and the regulators would decide.

The regulators were also the wait. The deal would take months to clear, the reports said, and the months were the limbo. The companies would keep running, the market would keep growing, and the approval would come or not come. The waiting was the uncertainty, and the uncertainty was the price. The cloud was the backdrop of the announcement, and the backdrop was the unknown. The deal was signed, and the deal was not done. The waiting was the price of the bigness, and the bigness was the price of the ambition.

8. The Lesson

The lesson of the deal was about the platform, and the platform was the pipe. The money in technology follows the platform, and the platform of the next decade was the phone. Google had missed the social wave, the critics said, and the critics were the caution; the company was determined not to miss the mobile wave, and the determination was the deal. The lesson was that the giants buy the future when they cannot build it. The buying was the admission, and the admission was the wisdom.

The lesson was also about the screen. The desktop had been the window of the world, and the window was moving to the pocket. The advertising was the first business to follow, and the following was the sign. The money was the vote, and the vote was the future. The deal is the November 2009 story, and the story is the lesson: the future belongs to whoever owns the pipes of the next platform. The announcement came on Tuesday, and the race for the small screen was on.

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