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RIM shopping for ad network to take on Google AdMob, Apple iAd

post #1 of 17
Thread Starter 
BlackBerry maker Research In Motion is seeking to buy a mobile advertising network to better position itself against Google's AdMob and Apple's iAd programs.

According to a report by the Wall Street Journal, RIM has entered talks with a number of ad networks, including Millennial Media.

Clash of the ad titans

Apple started the platform-integrated race when it entered talks with AdMob last fall, only to be outbid by Google, which paid $750 million to get ahold of the ad network.

Apple then snapped up second place Quattro Wireless for a reported $270 million, then convered the company into its iAd program of interactive, HTML5-based ads that open within apps rather than sending users to external web links in their browser when clicked.

Apple then changed the terms of its iOS developer agreement to forbid developers from using ad networks that collect private data without its approval, a move that is expected to greatly reduce the value of ad networks that rely upon targeted ads to generate results.

Millennial prefers independence

That restriction may play into Millennial's disinterest in being acquired by RIM, as being affiliated with the competing BlackBerry smartphone platform would further limit the ad network's ability to serve targeted ads to iPhone, iPod touch, and iPad users, who represent one of the largest and most valuable mobile demographics globally.

Millennial chief executive Paul Palmieri said in the report that his company preferred to launch a public offering rather than be acquired, noting, "We are on the path of being an independent company."

RIM also balked at the price Millennial asked, reportedly $400-500 million. That's almost twice what Apple paid to enter the mobile ad business, and nearly half what Google shelled out for AdMob. As the largest independent ad network, Millennial is unlikely to give up the ability to sell iOS ads without getting paid top dollar. Other independents, including Greystripe and JumpTap, may also be potential targets for a RIM acquisition.

Strategic alignments in the mobile world

RIM has struggled to keep pace with Apple's iPhone growth and new competition from Google's Android platform. Android has taken over as Verizon's flagship phones after the miserable launches of every iPhone-like model shipped by RIM.

RIM's beleaguered launches include the BlackBerry Storm, Storm2, and the recent debut of the BlackBerry Torch, which reportedly shipped just 150,000 units at launch, a figure in the same dismal ballpark as Sprint's Palm Pre and HTC EVO 4G. IDC says RIM's share of the global smartphone market slipped from 19.1 to 17.8 percent over the past year.

Apple has worked to remain competitive by bolstering its iPhone platform with the iPod touch and then the new iPad, and is expected to launch a TV oriented iOS product next month. Apple also recently added iAd into its iTunes App Store mix to provide developers with an alternative business model to paid apps. RIM is still working on building a tablet device, and lacks both a vibrant software store as well as anything like iTune's media sales.

Meanwhile, Google is entering the both tablet and TV markets with a mix of licensed Android and Chrome OS products, and is promoting ad-sponsored apps as its primary business model, a strategy that is reflected in the inability of developers to sell Android apps outside of the few countries Google currently supports for paid apps in Android Market.

The company has also unveiled a Chrome web apps store that only collects 5 percent fees on purchases, indicating that Google plans to migrate its development toward ad sponsored models, the company's core competency, rather than trying to copy Apple's iTunes-centric model of a curated online store. In contrast, Microsoft has outlined a strategy for its upcoming Windows Phone 7 that works very much like Apple's iTunes
post #2 of 17
How original of them.
Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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post #3 of 17
I wonder if RIM and Apple would have done this if not for Android. Google may have shot themselves in the foot as the ad monopoly they have on the wired Internet might be fragmented by these moves in the wireless arena.
post #4 of 17
Quote:
Originally Posted by shadash View Post

I wonder if RIM and Apple would have done this if not for Android. Google may have shot themselves in the foot as the ad monopoly they have on the wired Internet might be fragmented by these moves in the wireless arena.

I agree with this completely. Google really screwed up big time by competing against its partners, IMO.

They lost the iPhone ad market (iAds). They will potentially lose the default search ability (We saw Apple add Bing as an option, but more importantly, mention and praise it in a Jobs keynote speech). They will lose the iOS maps soon enough.

Now, they are also about to lose the Blackberry Ad market.

Something else that will hurt them is Firefox. I am sure Firefox will be ready to jump to Yahoo/Bing as soon as their contract with Google expires (I think it will be a brilliant move for MS to offer Firefox as a default on Windows, on the condition that they have Bing replace Google as default search engine. I am not sure if they can do this because of their legal troubles though).
post #5 of 17
RIM should have bought Palm instead of dickering around with Blackberry 6.

RIM doesn't need an ad network... they need an OS!
post #6 of 17
Nothing better than sloppy ninths!
post #7 of 17
Pretty much any independent Ad network would balk at being acquired by RIM, because that means giving up on the lucrative iOS devices market. It increasingly looks like iOS is going to be used on even more Apple devices, including AppleTV or iTV. If the rumored 7" iPad comes out, that can only help iOS grow its marketshare.

I actually think the screen of the iPad and the Retina display of the iPhone 4 is the biggest weak link for Apple when it comes to ramping up production. So it really does make sense for Apple to look at other screen sizes, if that will increase supply.

I am sure Apple wants to milk this exclusive period when there is no competition in the tablet space, for the maximum.
post #8 of 17
Quote:
Originally Posted by addicted44 View Post

Something else that will hurt them is Firefox. I am sure Firefox will be ready to jump to Yahoo/Bing as soon as their contract with Google expires (I think it will be a brilliant move for MS to offer Firefox as a default on Windows, on the condition that they have Bing replace Google as default search engine. I am not sure if they can do this because of their legal troubles though).

And the fact that nearly all of Mozilla's funding comes from Google.
post #9 of 17
Quote:
Originally Posted by RichyS View Post

And the fact that nearly all of Mozilla's funding comes from Google.

Funding which will be cut off once Google renders Firefox irrelevant. So, they'd be smart to start weaning themselves now. That and take off their ideological blinders and stop wasting their time with the patent encumbered WebM video.
post #10 of 17
I think this points to one reason why the feds made a mistake allowing the AdMob acquisition to go through. Clearly the trend here is going to be that each platform is going to have its own ad network, and independent networks will find it difficult to compete, even without the platform owners rigging the competition unlawfully. But, now that the practice has been sanctioned, it's going to be difficult, if not impossible, for the government to reverse the trend.

Millennial might do better to just take the money and run.
post #11 of 17
Apple leads. The rest follows and copies. Poorly. Again.

In other news, water is still wet, and Steve Ballmer is still bald.
post #12 of 17
A day late and a dollar short...Jobs' greatest contribution to tech is his ability to 'corral' the software/hardware engineers and force them to produce quality, user friendly products!

I couldn't imagine all of us using a blackberry and carrying around a windows 3.8 creaky dell laptop! ughhhh!

I'm carrying an iPhone 4 and an iPad...or I will be when the iPhone is delivered! August 31st!

Thanks Steve!
post #13 of 17
Quote:
Originally Posted by Cubert View Post

Apple leads. The rest follows and copies. Poorly. Again.

In other news, water is still wet, and Steve Ballmer is still bald.

Well he is not completely bald yet. Let's see what happens when Windows Mobile 7 phones get launched.
post #14 of 17
Quote:
Originally Posted by addicted44 View Post

Something else that will hurt them is Firefox. I am sure Firefox will be ready to jump to Yahoo/Bing as soon as their contract with Google expires (I think it will be a brilliant move for MS to offer Firefox as a default on Windows, on the condition that they have Bing replace Google as default search engine. I am not sure if they can do this because of their legal troubles though).

Only if MS coughs up the same amount of $$$ for Bing to replace Google. MS can afford to but culture wise the FOSS world is rabidly anti-MS to make this a non-starter for Mozilla unless the $$$ delta is very large.
post #15 of 17
Quote:
Originally Posted by anonymouse View Post

Funding which will be cut off once Google renders Firefox irrelevant. So, they'd be smart to start weaning themselves now. That and take off their ideological blinders and stop wasting their time with the patent encumbered WebM video.

I like Chrome but more sites are Firefox compatible than Safari or Chrome. Pretty danged hard to render Firefox irrelevant. And wean themselves from pretty much their only useful revenue stream would REALLY make them irrelevant as they'd be dependent on only open source coders.

Not a chance for either Google or Mozilla to change current arrangements. Google gets some good will from the open source community (which it sorely needs because the FSF folks are demanding) and Mozilla gets to stay relevant.
post #16 of 17
Quote:
Originally Posted by nht View Post

Quote:
Originally Posted by anonymouse View Post

Funding which will be cut off once Google renders Firefox irrelevant. So, they'd be smart to start weaning themselves now. That and take off their ideological blinders and stop wasting their time with the patent encumbered WebM video.

I like Chrome but more sites are Firefox compatible than Safari or Chrome. Pretty danged hard to render Firefox irrelevant. And wean themselves from pretty much their only useful revenue stream would REALLY make them irrelevant as they'd be dependent on only open source coders.

Wait a second: Why wouldn't you make them irrelevant?

Or put it this way: What would happen if Google shut off funding? Well, over time, many of the Firefox users would switch to Chrome as it clearly becomes superior to Firefox. Chrome lets Google better calculate the right ads to bring to people, which brings them in more money. It makes great business sense. And as to keeping open-source developers happy? "We have Chrome OS and Android; welcome aboard!" And over time, more sites would develop with Chrome in mind, considering its marketshare. Actually, I figure that's going to happen, anyway, but that's a whole 'nuther story.

Perhaps that's the most shrewd and diabolical, if not evil, thing you've read, today, but it's still there. Mind you, I'm pretty sure that the Firefox team would get a deal with Microsoft/Bing if they got desperate enough for cash. Although, what if Microsoft decided to let Firefox starve, so they could purchase Mozilla for a song?
post #17 of 17
Quote:
Originally Posted by mikemikeb View Post

Wait a second: Why wouldn't you make them irrelevant?

Or put it this way: What would happen if Google shut off funding? Well, over time, many of the Firefox users would switch to Chrome as it clearly becomes superior to Firefox. Chrome lets Google better calculate the right ads to bring to people, which brings them in more money. It makes great business sense. And as to keeping open-source developers happy? "We have Chrome OS and Android; welcome aboard!" And over time, more sites would develop with Chrome in mind, considering its marketshare. Actually, I figure that's going to happen, anyway, but that's a whole 'nuther story.

The even better strategy for Google is to "help" Mozilla tie its hands behind its back with ideological issues while technology marches on. People will switch on their own, and once the Firefox market share drops to a certain point, Google can just say that the level of interest doesn't justify the investment any longer, that way they don't even look like the bad guys.
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