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You are here: Home / Mobile Industry News / RIM Hunts Mobile-Advertising Network
RIM Seeks Mobile-Ad Network To Make Apps Profitable
RIM Seeks Mobile-Ad Network To Make Apps Profitable
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
AUGUST
19
2010
As it watches Android and Apple eat away at its smartphone market share, Research In Motion is looking for ways to win the attention of consumers and developers. RIM reportedly hopes to attract developers with a yet-to-be purchased mobile-ad network that would pull in application makers and potentially bring consumers with them.

According to The Wall Street Journal, RIM has held talks with Millennial Media, which bills itself as the largest independent mobile-ad network, about a possible acquisition. However, the discussions reportedly stalled over disputes about the value of the company that serves ads on both internal and third-party mobile web sites.

What's Millennial Worth?

Millennial is the largest pure-play mobile-ad network left after its competitors were scooped up by RIM rivals. Google announced plans to acquire AdMob for $750 million in November 2009, and Apple followed suit by acquiring Quattro Wireless for an undisclosed amount in January 2010.

Millennial is the next probable acquisition target, but the company is reportedly holding out on price. The Journal reported that Millennial is asking for between $400 million and $500 million. RIM hasn't been willing to invest at that price.

"If you are a platform provider, you need to provide ways for application developers to monetize their applications, and one of the best ways to do that is through advertising," said Michael Gartenberg, a partner at Altimeter Group. "It's one of the reasons why Google has gotten into that business. It's one of the reasons why Apple has gotten into that business."

Gartenberg said it's not surprising that RIM would explore the mobile-ad network space, given the popularity of both apps and mobile advertising. If RIM doesn't acquire Millennial, it could pick up any number of smaller players in the space, he said. But Millennial's stature in the market comes with a big price tag.

Stemming the Tide

According to IDC, RIM held 17.8 percent of the smartphone market in the second quarter. While RIM is a force to be reckoned with on the corporate side of the smartphone world, it has failed to match Google or Apple on the consumer side. RIM may even be losing business customers. RIM's market share is down nearly two percentage points from a year ago.

"Today, most developers are in this because they want to find ways of making money, and these ad networks provide them that, particularly in a market where the aggregate cost of a mobile application is trending rapidly toward 99 cents," Gartenberg said.

"It's a hard cycle for developers to get out of. Ad networks give them a way to monetize without having to price their application at $20 or more," he added. "So if you are RIM and you are trying to attract developers, you've got to show them there's a way they can make money on your platform the way they can on Apple, Microsoft or Google."

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