Thu, 08/19/2010 – 11:44 by The Wall Street Journal
reported yesterday that RIM was/is in talks to acquire mobile ad network Millennial Media:
Under pressure in the increasingly competitive wireless market, BlackBerry maker Research in Motion Ltd. is shopping for a mobile advertising network, people familiar with the matter said.
In recent months, the Canadian device maker has held talks with Baltimore-based mobile ad network Millennial Media about a potential acquisition, these people said. But the talks have stalled over disagreements regarding the value of Millennial, which serves advertisements on its own network of mobile websites. It also brokers ad sales to a group of other mobile ad networks.
The proposed sale price, at which RIM has balked reportedly, is $400 to $500 million. Assuming all this is relatively accurate the failure of these talks may turn out to be a good thing for Millennial in the end.
First, why might RIM want to buy an ad network? The rationale would have to be the same as Apple’s: keep developers fed and happy and ensure that its platform and apps have a revenue stream. Beyond this Millennial could help develop/serve ads across the “RIM network” (its installed base of users). According to
comScore, RIM/BlackBerry has 42% of the US smartphone market, followed by Apple with 24%.
The similarly situated Nokia previously bought Enpocket, although I think there’s essentially nothing left of that organization.
RIM, with its legacy enterprise focus and related “buttoned down” culture, would probably not be a good fit with Millennial and its consumer-facing ads orientation — unless RIM was totally hands off. There’s also the question of whether RIM would continue to operate the broader network or simply focus Millennial’s efforts on RIM devices and its developer ecosystem, as Apple is now doing. Apple is, as expected,
shutting down the Quattro network to focus entirely on iAds. That would probably also happen at RIM.
Getting into the advertising business might also be something of a distraction for RIM. Arguably buying a network doesn’t get the company where it needs to go: better consumer products that really excite people. So while buying a network is one of those things that might make sense on the whiteboard, it might not turn out to “on the ground.”
Millennial will probably get bought at some point by someone already in the interactive ads business. Alternatively the company could go public, as has been rumored.
By the same token, if RIM feels that it must have an ad platform/network to compete and to ensure its apps ecosystem remains healthy and grows, it probably will buy someone else. There are a number of other possibilities. My guess would be Jumptap’s on deck.
