Mobile Marketing Company Velti Acquires Ad Infuse

cellSignaling ongoing consolidation within mobile advertising, London-based mobile marketing company Velti on Tuesday announced its acquisition of mobile ad startup Ad Infuse. Terms of the agreement were not disclosed.

Started in 2005, San Francisco-based Ad Infuse delivers targeted mobile advertising based on subscriber demographic and behavioral data. Despite raising $18 million in venture capital to date and gaining customers including Procter & Gamble, Orange and France Telecom, the weakening economy led the company to seek out a buyer.

"There's no getting around the economy and the changes we started to see a while back," said Ad Infuse CEO Brian Cowley, who will become general manager of Velti North America under the agreement.

Velti, which has more than 400 employees in 35 countries, said the move would expand its U.S. presence and help accelerate its mobile growth. The company plans to take on Ad Infuse's staff of 30 and integrate its technology into its own mobile marketing platform geared to agencies and advertisers.

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"Ad Infuse is a leader in personalized mobile advertising," said Velti CEO Alex Moukas. "That ties in very nicely with our mobile marketing platform which focuses on what happens after someone sees a (mobile) banner ad and clicks on it." He noted that Ad Infuse also brings a strong client base in the U.S. and Europe, and said Velti planned to maintain the company's name as a separate brand.

Velti had revenue of $70 million in 2008 with a profit of $17 million. It expects revenue in the first quarter of 2009 to be 50% higher than a year ago.

Funding for mobile startups like Ad Infuse has plunged in recent months as the high expectations for the growth of mobile advertising have been dimmed by lingering recession. In a report released this week, mobile consulting firm Chetan Sharma said venture financing in the mobile sector had dropped by 58% in the first quarter compared to the year-earlier period.

"There's a very strong level of conservative behavior right now compared to the amount of investment that took place nine months ago," said Cowley, whose company had revenue of $3.5 million last year but wasn't yet profitable.

The acquisition of Ad Infuse follows that of mobile ad network mSnap in March by direct marketing firm SmartReply.

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