BoomTown » San Mateo

Google Acquires AdMob for $750 Million in Stock (Plus the Press Release and Video With CEO)

Kara Swisher — Mon, 09 Nov 2009 17:33:49 +0000

Google has acquired AdMob for $750 million, a huge price for an innovative start-up that has pioneered online ads on mobile and now smart phones.

BoomTown visited AdMob last fall and posted about how it was likely to eventually be acquired by…Google (GOOG)!

(Google has provided a primer on the sale, which you can read about here.)

The move is a major one for Google, which has been pushing hard into the mobile advertising space as it seeks to grow its already considerable Web search business. AdMob is arguably the most innovative and fastest out of the gate in the nascent arena.

As I wrote previously about the company’s prospects:

While there are very few bright spots to look at in the start-up space in Silicon Valley these days, especially those relying on online advertising, the San Mateo, Calif.-based AdMob is at least slightly shiny.

The mobile advertising marketplace, backed by Sequoia Capital and Accel Partners, just got a big slug of funding–almost $16 million–to keep pushing to get ads on mobile phones, which has gotten a huge boost from the popularity of the iPhone.

The massive data usage by users of the popular mobile device by Apple (AAPL) has clearly turbocharged AdMob’s prospects, which were already on the rise. Compared to a year ago, the company said, the number of ads it served more than tripled the number of ads served on a monthly basis to 4.5 billion.

Obviously, the better quality and more actionable nature of ads on improved screens is the reason for the shift, which should accelerate as more smartphones like Google’s G1 and the newest Blackberry Storm from RIM (RIMM) become more popular too.

Most importantly, even now, AdMob is cash flow-positive, which is not a bad thing to be in the current econalypse. It also has a cushion of cash–AdMob had previously garnered $15 million in funding from Sequoia and Accel.

It’s not all sunshine and daisies, of course, since the ad market in general is headed for a deep slump, and new markets are not going to grow as quickly, as marketers pull back from spending.

But, when the economy turns, the mobile advertising market is clearly going to be a fast-growing arena, with big players like Google, Yahoo (YHOO), Nokia (NOK) and Microsoft (MSFT) as AdMob competitors (or potential acquirers, especially Google).

With the money it just raised, AdMob said it would be getting ready for that race, and also use it to expand internationally.

Here’s a video interview with Omar Hamoui, founder and CEO of AdMob, on all this and more, as well as a tour of company’s offices:

[ See post to watch video ]

And, here’s the press release:

Google to Acquire AdMob

MOUNTAIN VIEW, Calif.–(BUSINESS WIRE)–Google Inc. (NASDAQ:GOOG) today announced that it has signed a definitive agreement to acquire AdMob, a mobile display ad technology provider, for $750 million in stock. This acquisition will enhance Google’s existing expertise and technology in mobile advertising, while also giving advertisers and publishers more choice in this growing new area.

“Mobile advertising has enormous potential as a marketing medium and while this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time,” said Susan Wojcicki, Vice President of Product Management at Google. “AdMob is the quintessential Silicon Valley startup–generating impressive year on year revenue growth–and we’re excited to welcome this talented team to Google.”

“I think people underestimate how important ads have been to funding the development of innovative content on the Internet. Our goal all along at AdMob has been to make it possible for developers and publishers to bring their products and ideas to mobile with the same business model,” said Omar Hamoui, Founder and CEO of AdMob. “We’re proud of the progress we’ve made towards accomplishing this goal, and joining Google will only accelerate this process, ultimately leading to very real benefits for end users around the world. As publishers and developers generate more revenue from their mobile products, they will invest more, and their mobile offerings will become richer, more creative and more robust.”

The deal will help Google in its efforts to develop more effective tools for creating, serving and analyzing emerging mobile ads formats. As this ecosystem continues to grow, the company expects these new marketing media to offer significant benefits:

Advertisers will be better able to engage mobile users with AdMob’s ad formats

Publishers and developers will be able to monetize their content more effectively, which has benefits for the wider mobile ecosystem

Users will see more relevant ads and ultimately get access to more ad-supported content and applications – improving their mobile experience

“Attracting the world’s top engineering talent and people with entrepreneurial vision to Google has always been crucial to our success. AdMob’s proven track record in innovating at speed will help maintain that culture–which is why we are so excited to be working with them,” added Vic Gundotra, Vice President of Engineering at Google.

Both companies have approved the transaction, which is subject to customary closing conditions.

Please see this disclosure related to me and Google.

VMware Forks Over $420 Million for SpringSource (Plus the Press Release, Etc.)

Kara Swisher — Mon, 10 Aug 2009 20:22:54 +0000

It’s certainly acquisition fever in Silicon Valley today.

After it was announced that that social networking giant Facebook had bought online content sharing start-up FriendFeed, now comes the news that VMware has purchased SpringSource, a privately held enterprise and Web application development and management cloud computing start-up.

The price? That would be $420 million in cash and stock.

While the blogosphere–including BoomTown–will inevitably find the FaceFeed deal more riveting, this one is obviously more important.

With the purchase of San Mateo, Ca.-based SpringSource, Palo Alto, Calif.-based, VMware–which is a top player in the virtualization space–is adding to its cloud-computing application-management strength and its ties to the open-source community.

Said VMware in a press release about the five-year-old SpringSource buy:

“VMware will acquire SpringSource for approximately $362 million in cash and equity plus the assumption of approximately $58 million of unvested stock and options. The acquisition has been approved by SpringSource’s stockholders and is expected to close in the third quarter of 2009, subject to customary closing conditions.”

Here’s the full press release from VMware (plus, here is a link to a blog post by SpringSource CEO Rod Johnson:

VMware to Acquire SpringSource

Company Adds Modern Application Platform to Cloud Infrastructure Strategy

PALO ALTO, Calif., August 10, 2009–VMware, Inc., (NYSE: VMW), the global leader in virtualization solutions from the desktop through the datacenter and to the cloud, today announced a major step forward in its journey to help simplify IT by entering into a definitive agreement to acquire privately held SpringSource, a leader in enterprise and web application development and management. VMware and SpringSource plan to deliver compelling new solutions that enable companies to more efficiently build, run and manage applications within both internal and external cloud architectures.

“Today’s modern computing environments are moving to an application and data-centric world powered by state of the art virtualized and cloud computing platforms,” said Paul Maritz, president and chief executive officer, VMware. “The combination of SpringSource and VMware capitalizes on this shift and places us right at the intersection of the most important forces in the software market today–virtualization, modern application frameworks and cloud computing.”

VMware will acquire SpringSource for approximately $362 million in cash and equity plus the assumption of approximately $58 million of unvested stock and options. The acquisition has been approved by SpringSource’s stockholders and is expected to close in the third quarter of 2009, subject to customary closing conditions.

SpringSource is the innovator and driving force behind some of the most popular and fastest growing open source developer communities, application frameworks, runtimes, and management tools. In just five years, SpringSource has established a presence in a majority of the Global 2000 companies, and is rapidly delivering a new generation of commercial products and services. VMware plans to continue to support the principles that have made SpringSource solutions popular: the interoperability of SpringSource software with a wide variety of middleware software, and the open source model that is important to the developer community.

Together, VMware and SpringSource plan to further innovate and develop integrated Platform as a Service (PaaS) solutions that can be hosted at customer datacenters or at cloud service providers. These solutions will allow customers to rapidly build new enterprise and web applications and run and manage these applications in the same dynamic, scalable and cost-efficient vSphere-based internal or external clouds that can also host and manage their existing applications, providing an evolutionary path to the future. Forrester Research expects the emerging and rapidly growing PaaS market to expand to $15B by 2016. (Platform-As-A-Service Market Sizing, July 13, 2009)

“VMware has led the modernization of datacenter infrastructures through innovative virtualization and cloud architectures, providing customers with cost savings, agility and choice,” said Rod Johnson, chief executive officer, SpringSource. “The SpringSource team and community are committed to revolutionizing the way companies build, run and manage applications. By combining forces, I’m confident that we’ll be able to deliver a set of truly remarkable solutions that dramatically simplify enterprise IT.”

Background on SpringSource

SpringSource is at the forefront of “lean software,” a concept that is being rapidly adopted by enterprises focused on dramatically cutting cost and complexity, increasing productivity, and accelerating the delivery of high-quality, business-critical applications. SpringSource’s offerings and their underlying open-source technologies are uniquely able to address a wide range of corporate, web and commercial applications through a dynamic, yet consistent architecture. SpringSource counts a majority of the Global 2000 as current customers, and has a rapidly growing business delivering support, training and commercial software based on the well-known open source technologies and communities led by SpringSource:

The Spring Framework is the leading enterprise Java programming model; currently supporting half of all enterprise Java projects and used by approximately two million developers worldwide. The Spring Framework provides a high productivity, lightweight programming environment that makes applications portable across open source and commercial application server environments from IBM, Oracle and others.

Apache Tomcat is the world’s most widely used Java application server, deployed at more than 60% of all organizations running Java server applications. SpringSource is the key contributor to and maintainer of Tomcat and is responsible for more than 95% of the bug fixes over the past two years.

SpringSource leads Groovy and Grails, a rapidly growing dynamic language and Web application framework, each with more than 70,000 downloads per month. Together, Groovy and Grails deliver the rapid application productivity of Ruby on Rails for web applications, while maintaining skill-set and infrastructure compatibility with Java Virtual Machine (JVM) environments.

With more than 3,500 deployments worldwide, SpringSource’s Hyperic application monitoring and management tools are recognized as among the leading open source offerings in the space. In March, SpringSource/Hyperic was named one of Gartner’s “Cool Vendors in Cloud Computing Management and Professional Services.”

Facebook's Privacy Chief (And California Attorney General Candidate) Chris Kelly Speaks!

Kara Swisher — Tue, 12 May 2009 09:52:53 +0000

BoomTown tried to get Chris Kelly (pictured here) to give up more during an onstage interview I did with the Facebook chief privacy officer last night at the third “Tech Policy Summit” and was only moderately successful in the endeavor.

He talked about the recent Terms of Service debacle as a snafu that got sensationalized by the media, the Beacon advertising controversy as a snafu that got sensationalized by the media and the Free-the-Scoble-5,000 data-sharing debate as a snafu that got sensationalized by the media.

But Kelly also managed to say that the media were sensational for keeping Facebook–the dominant social-networking site in the whole wide world–honest as it grows into a behemoth grasping a scary amount of personal information on its 200 million users in its claws.

Oh, he is a smoothie all right, as a lawyer and now as a wannabe politician.

Kelly–who is still working at the start-up, where his job it is to make sure consumer data, privacy, the children and CEO Mark Zuckerberg’s reputation are all safe and sound–is also running for the job of California’s attorney general.

(Here is his Facebook page about the effort.)

Born in Silicon Valley, with a troika of diplomas from fancy schools (undergraduate from Georgetown in 1991, a master’s from Yale in 1992 and a law degree from Harvard in 1997), Kelly worked as a lawyer and also as a policy adviser for President Bill Clinton’s White House Domestic Policy Council and Department of Education before coming to Facebook four years ago.

For a closer look-see at the candidate for the Golden State’s top cop position, here’s a video interview I did with him after the onstage chat in San Mateo, Calif.:

[ See post to watch video ]

A Techtastically Busy Week: A Grab Bag of Digital Stuff to Consider

Kara Swisher — Mon, 11 May 2009 13:31:58 +0000

It’s another packed week for tech, especially in Silicon Valley, where the kibitzing never ends and the econalypse is almost completely ignored.

First up this week is an event today at which BoomTown will appear called “The Free! Summit: Inside the Digital Economy” in San Mateo.

Given all the recent debate about free versus paid, as traditional media companies take aim at the issue, it should be interesting.

I will be on an afternoon panel called “Business Models That Work,” which is about the the future of news and what’s next for journalism in the digital economy.

The other panelists are: Dan Gillmor, Director, Knight Center for Digital Media Entrepreneurship, Arizona State University; Alan Mutter, Adjunct Faculty Member, Graduate School of Journalism at UC Berkeley and founder, “Reflections of a Newsosaur”; and Marshall Van Alstyne, Associate Professor of Information Economics, Boston University and Visiting Professor, MIT.

Later in the day, the event will morph into the third “Tech Policy Summit,” where I get to do a one-on-one interview with Facebook’s Chief Privacy Officer, Chris Kelly, who is still at the social-networking site but is also now running for the job of California’s Attorney General.

(My All Things Digital partner Walt Mossberg will appear on Tuesday, along with a solid slate of speakers.)

On Thursday, ContentNext Media is holding its third EconSm conference, this time focusing on mobile, in an all-day event in San Francisco.

Speakers include: Zander Lurie, CFO, CBS (CBS) Interactive; angel investor Ron Conway (see my recent video interview with him here); Eric Johnson, president and COO, Wolfgang’s Vault; Joe Kennedy, CEO and president, Pandora; and Kevin Thau, director of mobile business development at Twitter.

Wrote paidContent’s Staci Kramer: “Much has changed as we get ready for our third EconSM–including the name. The acronym is still the same but this year it’s about the intersection of social and mobile. Social media has passed the gimmick stage–although not everyone has figured that out–and is part of the daily fabric for an increasing number of people.”

And, if you have even more time, the Aspen Institute has just published J.D. Lasica’s 110-page e-book, “Identity in the Age of Cloud Computing: The Next-Generation Internet’s Impact on Business, Governance and Social Interaction.”

Lasica told me that he wrote the report after a roundtable of 30 experts in identity and technology (people like John Seely Brown and Esther Dyson) was convened in Aspen to discuss the ramifications of the cloud on a societal level.

He talked the Aspen Institute into releasing the e-book under a Creative Commons license, the first time it has ever done that.

And lest you think this is too focused on just Silicon Valley, I missed attending the Seattle 2.0 Awards last week, but here are the winners:

Best Start-up: Picnik
Best Boot-strapped Start-up: Picnik
Best Start-up CEO: Jonathan Sposato (Picnik)
Best Start-up Technologist: Nat Brown (iLike)
Best Venture Capitalist: Matt McIlwain (Madrona Venture Group)
Best Angel Investor: Geoff Entress
Best Start-up Product Designer: Peter Roman (Picnik)
Best Service Provider to Start-ups: Shannon Swift (Swift HR Solutions)
Best Blog from/about Start-ups: TechFlash/John Cook
Best Social Event for Start-ups: Lunch 2.0 by Josh Maher

Kara Visits AdMob (And Talks About How the iPhone Turbocharged the Mobile Advertising Business)

Kara Swisher — Fri, 14 Nov 2008 16:48:12 +0000

While there are very few bright spots to look at in the start-up space in Silicon Valley these days, especially those relying on online advertising, the San Mateo, Calif.-based AdMob is at least slightly shiny.

The mobile advertising marketplace, backed by Sequoia Capital and Accel Partners, just got a big slug of funding–almost $16 million–to keep pushing to get ads on mobile phones, which has gotten a huge boost from the popularity of the iPhone.

The number of ads AdMob is serving on the iPhone jumped to more than 100 million in September, compared to 35 million the month before, for example.

The massive data usage by users of the popular mobile device by Apple (AAPL) has clearly turbocharged AdMob’s prospects, which were already on the rise. Compared to a year ago, the company said, the number of ads it served more than tripled the number of ads served on a monthly basis to 4.5 billion.

Obviously, the better quality and more actionable nature of ads on improved screens is the reason for the shift, which should accelerate as more smartphones like Google’s G1 and newest Blackberry Storm from RIM (RIMM) become more popular too.

Most importantly, even now, AdMob is cash flow-positive, which is not a bad thing to be in the current econalypse. It also has a cushion of cash–AdMob had previously garnered $15 million in funding from Sequoia and Accel.

It’s not all sunshine and daisies, of course, since the ad market in general is headed for a deep slump, and new markets are not going to grow as quickly, as marketers pull back from spending.

But, when the economy turns, the mobile advertising market is clearly going to be a fast-growing arena, with big players like Google (GOOG), Yahoo (YHOO), Nokia (NOK) and Microsoft (MSFT) as AdMob competitors (or potential acquirers, especially Google).

With the money it just raised, AdMob said it would be getting ready for that race, and also use it to expand internationally.

Here’s my video interview with Omar Hamoui, Founder and CEO of AdMob, on all that and more, as well as a tour of its offices:

[ See post to watch video ]