This is apparently the second round of talks between the companies, after an earlier round broke off back in September. Previously InMobi tried to value itself at more than $2 billion in investment negotiations, but investors were only willing to value it at $1.8 billion.
Neither company would comment, but Google’s goal in acquiring InMobi would obviously be to boost its mobile ad reach and capabilities: InMobi claims to help deliver 138 billion ad impressions to one billion active users per month, and already works with brands including Yamaha, Microsoft, Adidas, Lancome and Macy’s.
At the same time, Google’s previous dominance in the rapidly growing mobile ad space has been steadily eroded by new competitors, led by Facebook. Sources cited by the India Times specifically noted competition from Facebook as a reason for Google’s decision to resume the acquisition talks.
According to eMarketer, Google’s market share in mobile ads declined from 52.6% in 2012 to 46.8% in 2014, while Facebook’s soared from 5.4% to 21.7% over the same period.
Google’s relative (proportional) decline compared to Facebook’s ascent is especially noteworthy because the search giant has an enormous foothold in mobile thanks to Android, which accounted for 84.7% of new units shipped as recently as the second quarter of 2014 according to IDC. However, Google’s huge footprint here doesn’t appear to have translated into sustained advertising reach -- which was presumably one of the main reasons for creating and distributing a free, open-source operating system in the first place.
Indeed, in terms of operating systems, Android accounted for 62.7% of mobile ad impressions in the fourth quarter of 2014, compared to 27.2% for Apple. But Apple iOS accounted for 51.7% of total mobile ad revenues, versus 41.2% for Android.