Google to Prompt Other Mobile Ads Networks Buys

Even post its recent acquisition of AdMob, Google is far from dominant in mobile ads, though it does control the largest, 24% slice of the market, according to a Nov. 23 report from consultant IDC. Google and AdMob should report $68 million in mobile ad revenue this year, IDC estimates. But Millennial Media, with its $51 million in sales, is nipping at Google’s heels. And Yahoo and Microsoft are firing on all cylinders in mobile ads as well.

Chances are, Google’s acquisition will prompt additional purchases by its competitors, and they won’t come cheap. “….both Yahoo! and Microsoft cannot afford to not also acquire either Millennial Media or Quattro Wireless, given that Google and AdMob’s combined revenue will be more than twice that of Yahoo!’s and three times that of Microsoft’s,” writes analyst Karsten Weide. “The problem for both Yahoo! and Microsoft is that Google’s valuation of AdMob of at least ten times 2009 worldwide revenue, more likely significantly more than that, will set Millennial’s and Quattro’s expectations: They could expect valuations of at least $550 million and $400 million, respectively.”