Google agrees to buy AdMob for $750 million in stock

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Google announced today that it has agreed to acquire the mobile display advertising startup AdMob for some $750 million in stock. Founded in 2006, the AdMob is a mobile advertising marketplace that connects advertisers with mobile publishers.

The deal comes as Google looks to decrease its reliance on desktop Internet ads, where growth is waning. AdMob has been a hit with advertisers interested in the mobile arena, and has benefited from the popularity of devices like Apple's iPhone and RIM's BlackBerry handsets. The US mobile ad market is expected to reach $2 billion to $3 billion by 2013, up from less than $1 billion now, according to Sanford C. Bernstein & Co.

Data from Morgan Stanley shows that iPhone and Android users browse the Web more than anyone else, and have contributed to Google's five-fold mobile search growth over the past two years. Users of those popular smartphones spend an average of nearly 90 minutes per day using applications on their devices. Google says that while mobile usage has taken off, the mobile Web is still in its infancy.

The company believes this deal will benefit publishers of mobile websites and applications, as well as advertisers. The former can look forward to better products and tools as well as more effective monetization of their content, and the latter can expect the deal to bring better, more relevant ads and greater reach. Meanwhile, users will gain access to ads that deliver more useful information.

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