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Microsoft snaps up mobile ad company
Just the ScreenTonic for challenging Google?

By Reuters

Published: Thursday 03 May 2007

Microsoft has agreed to acquire European mobile phone ad company ScreenTonic to try to gain a foothold in that rapidly growing market.

Paris-based ScreenTonic is one of the first companies in Europe to develop a platform to manage and place ads on the mobile web.

It also serves as an advertising agency for companies looking to develop marketing campaigns on phones. Investors in the start-up include venture capital firm 3i and I-Source Gestion, according to ScreenTonic's website.

Mobile phone advertising is still a nascent industry compared to web advertising but it is an area being targeted by Microsoft and web rivals Google and Yahoo!.

Advertising on the internet, especially pay-per-click ads alongside search results, erupted into a multibillion industry within a few years and online companies hope mobile phones will follow a similar growth trajectory.

Steve Berkowitz, senior vice president at Microsoft's online services group, said in a statement: "The acquisition of ScreenTonic will be part of our long-term strategy to deliver ad experiences that map to [the mobile internet]."

ABI Research forecasts global mobile marketing and advertising will increase sixfold to $19bn by 2011 from an estimated $3bn by the end of 2007.

Google has built a dominant online advertising business around its search engine and recently strengthened its position by agreeing to acquire online ad supplier DoubleClick for $3.1bn.

Microsoft did not disclose the financial terms of the deal.