Google Buys AdMob For $750 Million In Stock

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Google (GOOG) just made a big bet on mobile advertising: It acquired mobile ad network AdMob for $750 million in stock.

This deal is not surprising: Google has always been pegged as AdMob’s most likely acquirer.

While Google already has its own fledgling mobile advertising business, especially focused on search advertising, AdMob has taken an early lead with display advertising on smartphone platforms, such as Apple’s iPhone and even Google’s Android. AdMob received 2.6 billion ad requests from iPhone and iPod touch devices in September, up from 130 million in September ’08. (It received 10.2 billion total requests in September.)

Google has already made a Web site explaining the deal, here. In it, the company acknowledges there may be some regulatory scrutiny, but does not “currently” think the deal will face questions from tougher European regulators. “AdMob’s business simply is too small,” Google says.

Bigger picture: Mobile advertising is still tiny compared to Internet advertising, but companies like Google are obviously hoping it can be a growth driver. Kelsey Group projects the U.S. mobile ad market will reach $3.1 billion in 2013, up from $160 million in 2008.

But as Henry Blodget recently wrote, there are many unanswered questions about mobile ads that will need answers before it’s a real opportunity. Don’t miss, “Enough Empty-Headed Puffery About The Huge New Opportunity In Mobile Ads.”

The deal comes as AdMob was rumoured to be seeking new funding ahead of an IPO in about a year. (And as wacky, obviously incorrect rumours pegged Apple has a potential AdMob buyer last week.) The purchase price is a solid return for AdMob’s investors, including Sequoia Capital, Accel, and the DFJ Growth Fund. AdMob had raised about $50 million, according to CrunchBase.

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