Apple strikes into Google's advertising business

Paul Nesbitt

After Google's entrance into the smartphone hardware business to take on Apple's iPhone, Apple has snapped up Quattro Wireless, a mobile advertising company.

Apple and Google are now direct competitors in both the smartphone and advertising businesses, following Google's launch of the Nexus smartphone and Apple's $300 million purchase of Quattro Wireless.

Both Google and Apple both want a slice of the mobile advertising business, which was worth $416 million last year, but which is projected to grow to $1.6 billion by 2013. The mobile advertising business is primarily focused on delivering adverts – which can be text-based, video based or even interactive applications (like an iPhone app) – so that they appear on handset displays.

Last November Google snapped up a leading mobile advertising company, AdMob, for $750 million, after Apple had made earlier approaches to buy the company, according to industry insiders.

'You can just see the tempers rising between the two companies,' said US analyst Gene Munster at Piper Jaffray. 'Two years ago it was a very friendly relationship,' said Munster, recalling that Google CEO, Eric Schmidt used to be a director on Apple's board. 'Now just every day it gets more competitive.'

Now the mobile advertising market will be keenly fought over by Google, Apple, Yahoo and Microsoft.