Was Apple in talks to acquire AdMob before Google made its $750 million purchase?

Apple was reportedly in talks to purchase mobile advertising company AdMob before Google eventually made a winning offer of $750 million

Last week, Google announced that it was acquiring the mobile advertising company AdMob for $750 million in stock. AdMob, of course, is the largest mobile advertising company in the world and its ads can be seen on a plethora of iPhone apps. As the market for smartphones continues to expand, so does the market for high quality mobile apps, and in turn, so increases the opportunity for mobile advertising. As a matter of fact, AdMob even singled out the iPhone as the reason behind their company's success:

Then came the iPhone. Suddenly, Apple solved so many problems that had plagued mobile for so long. They showed all of us the way forward and their efforts have led to a landslide of rapid improvements in our space. We were so excited by the promise the iPhone represented that we shifted a significant portion of our attention to that device in its very early days. We launched the first iPhone ad units focused on the web and quickly added the capability to run ads in applications... But let there be no mistake. Our business, and the mobile industry in general, owes Apple a debt of gratitude.

Google's interest and subsequent purchase of AdMob makes a whole lot of sense given that advertising is the core of their business, but Google wasn't the only company reportedly interested in AdMob. Bloomberg, citing people familiar with negotiations, reports that Apple was in talks to purchase AdMob before Google made its winning offer.

The million dollar question, though, is why?

As opposed to many other tech heavyweights, Apple doesn't go around and snatch up companies by the dozen. Rather, its acquisitions are strategic and few and far in between (8 in the last decade), which makes Apple's supposed interest in AdMob all the more interesting.

Apple's penchant for controlling the whole widget, so to speak, is well-known and runs deep. From Apple's point of view, if millions of ads are showing up on its devices, then wouldn't it make sense for them to get involved in the mobile ad business and effectively toss the middleman (AdMob) out the window? When looked at from that perspective, Apple's interest makes a little bit more sense, but it still raises a few more questions than it answers. After all, Apple prefers to generate cash via the sale of high margin hardware, so why would it even bother getting involved in the low margin mobile ad business?  Might it have been a pre-emptive strike to prevent Google from getting a somewhat peripheral foothold in the iTunes App Store?  That's a huge stretch, and it's really mind boggling that Apple would even consider getting into serving mobile ads.  In the end, the Bloomberg report is certainly intriguing, but seems a bit too suspect to be believed.

• General discussions
• AdMob
• Apple
• Google
• mobile advertising