Google Acquires AdMob and Gizmo5, Plus Playfish Acquired by EA
It has been a very big day in acquisitions for both Google and Accel partners. Google has announced that they have acquired Admob and Gizmo5. Admob is a mobile advertising network in which cost Google $750 million.
AdMob founder Omar Hamoui sent the following letter to customers:
Today we announced that AdMob has signed a definitive agreement to be acquired by Google for $750 million. We are extremely excited about this new partnership and what it means for our advertiser, developer and publisher partners.
AdMob’s people, products and tools will continue to work to deliver successful campaigns for you and to effectively monetize your mobile traffic – no interruptions. Our product and engineering teams will keep building great products for our customers. Our sales team will keep working with our thousands of advertisers to deliver successful campaigns. Our business development team will keep working to maximize ad revenue for the more than 15,000 mobile Web sites and applications that make up AdMob’s publisher network.
After our deal closes, AdMob will work with Google to accelerate the pace of innovation in mobile and do an even better job for you. We believe this deal will benefit our advertisers, developers and publishers by:
*Increasing our investment in building innovative and engaging ad units across platforms and to further improve targeting and tracking.
*Building even more powerful relevance and optimization capabilities, and more powerful technology and tools to monetize mobile traffic.
*Increasing the effectiveness of display advertising on mobile devices by leveraging Google sales team, infrastructure and relationships.
*Improving the already high level of service and support we deliver to our advertisers, developers and publishers.
Im very surprised that Admob sold out to Google on this occassion. I know that $750 million is not an average sum of money, but with Googles track record of advertising products that aren’t Adsense is pretty terrible. Back in February 2007 Google purchased Adscape, which still hasn’t really taken their in-game advertising product to the next level. Additionally, Google killed Feedburner’s very profitable advertising network and replaced it directly with a much worse product for the type of market, Google Adsense. Accel partners won out big on this acquisition as they and Sequoia Capital were the early investors.
Gizmo5 Acquisition:
Gizmo5 was the other company in which Google purchased today, but for only around $30 million in cash. Gizmo5 is a VOIP infrastructure. In previous months Gizmo5 was in talks with Skype about a potential sale, mainly because Skype was having big issues with their current infrastructure. This is a very interested move for Google, I’m not entirely sure why they purchased VOIP infrastructure. The only possible solution is that they are thinking about tying it in with their current Google Voice offering.
EA purchase Playfish:
After lengthy negotiations, Electronic Arts closed it’s anticipated acquisition of social gaming startup Playfish for $275 million in cash. An additional $25 million in stock will be set aside for retaining the top talent at the startup, and another $100 million in earnouts are part of the deal as well if the business hits certain milestones. This has no reaffirmed how lucrative this market current is. I would not be surprised to see a Zynga IPO or Playdom acquistion in the first half of 2010.
