Apple’s Tasty Mobile-Advertising Bet

For Apple, there’s now an ad for that.

Apple’s purchase of mobile-advertising firm Quattro Wireless demonstrates, for anyone out of signal range lately, just how much mobile is shaking up the tech industry. It is telling that Apple, best known as a hardware-software company, for the first time in its history bought an ad-sales company. On the same day, online-ad company Google unveiled a new phone, the Nexus One, it will sell online. Uncertainty about how the mobile market will evolve is forcing companies to diversify out of their comfort zones.

Apple has a big head start in mobile with its lucrative iPhone business. It is expected to extend that with a tablet computer, complete with TV and film offerings as well as other features already available on the iPhone. But hardware is likely to be only the starting point in making money out of mobile. Selling ads, particularly on mobile apps, is emerging quickly, with e-commerce not far behind. Apple presumably sees potential in selling ads on the tablet, in particular, given the entertainment features it will offer.

Apple’s purchase of Quattro, which follows Google’s agreement to buy another mobile-ad firm, AdMob, ensures direct exposure to the still-small mobile-ad market. How well Apple’s culture meshes with the ad-sales business is a big question. Meanwhile, ad-expert Google has avoided entering hardware directly, by using HTC to make the Nexus One with Android software. But selling phones directly to consumers, instead of through the traditional carrier route, could pose a challenge. That said, with mobile so hot, it makes sense for both companies to spread their bets.


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