Apple Gets into the Ad Business

Momentum in the mobile ad market continues at a fever pitch. In story broken last night by Kara Swisher of All Things Digital and confirmed today by Quattro Wireless, Apple confirmed it is acquiring the mobile ad network for a reported $275 million. Apple also announced today that app downloads from its App Store had surpassed the three billion mark.

The timing for these announcements is no coincidence. Today was supposed to be “Nexus One” day, but instead, it’s Apple, not Google, that is grabbing headlines and hoarding mindshare.

I noted in an earlier post that I regarded Apple and Google as more “frenemies” than enemies, and that Google’s primary adversary remains Microsoft, with mobile constituting an important front in a much larger (and longer) war for computing supremacy. I continue to believe this to be the case from Google’s perspective, but Apple’s move today clearly signals that Apple regards Google as a major competitor in the mobile space.

As for the why behind the move, chalk it up to vertical integration: Apple builds and sells the iPhone, hosts the App Store and now, by incorporating Quattro into the fold, it can better monetize the ad-supported apps it offers through the App Store.  And then there’s the tablet angle, which Silicon Alley Reporter and the SiliconAngle blog both see as a factor behind the Quattro acquisition. Since the tablet remains a matter of conjecture – for now, at least – we can hold off on speculating on that aspect of the deal.

But regardless of the implications, which no doubt will become clearer in short order, it certainly breaks the mold. Then again, that’s something Apple’s used to doing.