Google in talks to strengthen mobile ad position with InMobi acquisition

Google is looking to strengthen its already dominant advertising business with a $1 billion (£670 million) acquisition of Bangalore-based startup InMobi, according to Reuters.

InMobi is not all that relevant in the West, but in Asia it is the largest mobile advertising provider. It serves ads to over one billion users, across 200 countries.

Even though Google has diversified its revenue in the past five years, a large portion of it still comes from advertising. As more users move to mobile, Google needs to be on top of the game, against companies like Facebook and Yahoo who have both made large steps in the mobile advertising business.

InMobi would give them a huge portfolio of users to hit with Google ads, alongside utilising some of InMobi’s mobile ad technologies.

The deal could come under fire from regulators, considering Google’s already dominant position in the advertising industry. Google acquired AdMob in 2010 for $750 million (£500 million), after months of sorting things out with the US Federal Trade Commission, and the InMobi acquisition will go through two different trade commissions in India and the US.

Google is currently under fire from the European Union as well, due to its dominant position in search and advertising. Europe will likely not have any part in the acquisition regulation, due to neither going through the regulator office in Europe.

Google set up a foothold in India a few months ago, under its investment arm Google Capital. It could be looking into further acquisitions and investments in India’s growing “Silicon Valley” scene, with big players like Micromax and Flipkart looking towards global adoption in the next five years.