The cold war between Apple and Google intensified with Apple’s acquisition of mobile advertising firm Quattro. With this acquisition Apple encroached upon Google’s turf, just a day after Google launched its smart phone – Nexus One, which is designed to challenge the iPhone.
Quattro’s advertising network spans mobile Web sites and applications. The company is a competitor to AdMob, which Google agreed to buy in November for $750 million. The grapevine has it that Apple initially started talks to gulp down AdMob, a few weeks before Google announced its deal, supposedly in an effort to prevent Google from obtaining detailed information about Apple’s iPhone App Store. AdMob is one of the largest sellers of advertisements on the iPhone, placing ads in many popular free apps.
The uncertainty about how the mobile market will evolve in the near future has seen companies spreading out their bets and diversifying out of their comfort zone. While Apple, maker of the iPhone, barged into advertising by acquiring Quattro on Tuesday, Google, which is primarily an advertising company, began selling its first piece of hardware, the Nexus One smart phone.
The rationale behind having Quattro is pretty simple – Apple realizes the business potential in selling ads over mobile phones, given the entertainment features it will offer. The business of placing ads on cell phone is naïve, but is quickly expanding. Advertisers spent just $416 million on mobile ads in 2009, compared with $22 billion on Web sites, according to eMarketer – a company engaged in research and analysis of Internet, e-business, online marketing, media and emerging technologies. According to estimates, mobile ad spending is expected to grow to $1.6 billion by 2013, as smart phones and other small mobile computing devices become increasingly popular. With Quattro, Apple will now compete in the ad market with Google’s AdMob along with Microsoft and Yahoo.
However there is a catch! Like Google, Apple too might face headwinds in completing the Quattro’s acquisition. Recently, two consumer groups asked the US Federal Trade Commission to block Google Inc. acquisition of AdMob Inc., on the grounds that the deal would thwart competition to the detriment of consumers. Apple too might have to a tightrope walking.