Google is drilling more deeply into the mobile advertising space. On Thursday, the search giant announced plans to acquire another mobile social network: Zingku. Financial terms of the deal were undisclosed.
Zingku's service lets users create and exchange information, such as invitations or mobile flyers. On the mobile phone, Zingku relies on standard text messaging. On the Web, the service uses a browser and instant-messaging application. That means there is nothing to install.
Zingku integrates the mobile phone with a personalized Web site so users can move things -- or as the company likes to say, "zing" -- back and forth between the Web and their mobile phone, and to connect with friends.
Google's Mobile Maneuvers
Google bought a similar mobile social network called Dodgeball in 2005. It has yet to take off, though. Likewise, Google bought GrandCentral, a service that ties together multiple phone numbers, without much fanfare. Zingku offers a broader scope with the promise of unifying instant messaging, SMS, and e-mail.
At some level, it would seem, Google will compete directly with MySpace. On Monday, the Fox Interactive Media property announced it would launch a series of new, ad-supported mobile Web sites targeting mobile device users. Fox partnered with Millennial Media, a mobile-advertising network, to sell and serve the mobile ads.
Meanwhile, Google made another major move in the mobile advertising world last week with its new program -- AdSense for Mobile. The program contextually targets ads to mobile Web site content. As its name suggests, the program aims to give AdSense publishing partners more opportunities to earn revenue through the targeted placement of mobile text ads.
Frost & Sullivan figures the mobile advertising market in the U.S. alone will generate $2.12 billion in revenue by 2011 compared to $301 million in 2006. The Shoesteck Group estimates $10 billion globally by 2010, while EJL Wireless Research pegs the worldwide mobile advertising market at $9.5 billion by 2011.
Too Soon for Mobile Ads?
The opportunity for mobile advertising appears attractive, but will it bear fruit? Daniel Taylor, an analyst at Yankee Group, put the hype into context. He offered a scenario in which a wireless carrier boasts 50 million subscribers. Theoretically, he explained, the carrier could serve up 10 ads a day to each subscriber. But at some point, he figured, the subscribers are going to want a discount on their cellular bill.
"Over time, we can evolve the business model to pinpoint how much mobile ads are going to have to cost. Those ads have to fit in relation to other types of advertising and advertising rates," Taylor explained.
"It could be that there are certain types of mobile advertising that would be too expensive and will not perform as well," he speculated. "There could be others that are expensive but perform extremely well and will be worth it to advertisers."
He concluded by saying that mobile advertising is "still a work in progress."