RIM Going After Mobile Advertising Market - InformationWeek

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8/20/2010
12:01 AM
Ed Hansberry
Ed Hansberry
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RIM Going After Mobile Advertising Market

In a sign that RIM recognizes that it cannot live off of the enterprise market alone, it is making moves to get into the mobile advertising market. In doing so, RIM is pitting itself squarely against the same companies making its life rough in the smartphone world - Apple and Google.

In a sign that RIM recognizes that it cannot live off of the enterprise market alone, it is making moves to get into the mobile advertising market. In doing so, RIM is pitting itself squarely against the same companies making its life rough in the smartphone world - Apple and Google.According to the Wall Street Journal, RIM is considering taking the same path Apple and Google did when they got into the mobile advertising market; by buying its way in. Apple purchased Quattro Wireless for $275 million in early January of this year and in November of 2009, Google grabbed AdMob for $750 million.

RIM is courting Millennial Media and is balking at the $400-$500 million asking price. RIM feels both Google and Apple paid too much for what they got. In the case of Apple, RIM may well be right. Apple announced today that they are shutting down Quattro and putting all of their efforts into iAd.

Revenues for the market are fairly small, but will continue to grow. For 2009, the total mobile advertising market was around $416 million and is expected to grow 50% to the $600 million level in 2010. As more users get smartphones, which even in this economy are showing no signs of slowing sales, that revenue will continue to move upwards.

You don't get a lot of advertising by catering to the enterprise market, and RIM's best shot at consumer interest with the Torch hasn't really impressed anyone. By getting into the advertising market may be a way for RIM to keep itself relevant outside of the enterprise market until it can get its smartphone act together. If they aren't willing to buy into it though fearing the price is too steep, starting from ground zero may take too long, especially for a company with little to no advertising know-how.

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