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August 19, 2010

RIM to Acquire Mobile Ad Company? Only If the Price Is Right

By Susan J. Campbell, TMCnet Contributing Editor


The wireless market is intensively competitive; which means new business models and strategic partnerships to deliver the content consumers demand. A recent Wall Street Journal report highlighted the recent shopping activities of BlackBerry (News - Alert) maker Research in Motion (RIM).

It appears RIM is in the market for a mobile advertising network. The Canadian device maker has recently been in talks with ad network Millennial Media about the possibility of an acquisition. Reportedly, the talks have stalled over disagreements regarding the value of the company.Millennial serves advertisements on its own network of mobile websites. The company also brokers ad sales to a group of other mobile ad networks. The company has been inspired by the recent sales of AdMob (News - Alert) and Quattro Wireless and asked for an amount between $400 million and $500 million.

Sources close to the situation say RIM is unwilling to meet that price.RIM may want to think twice about walking away from this deal, however, as it is under mounting pressure to compete with Google (News - Alert) and Apple, responsible for the purchases of AdMob and Quattro, as both players are driving forces in wireless computing.

According to an early August interview with Millennial Chief Executive Paul Palmieri, the company hopes to make a public offering of shares rather than be acquired. "We are on the path of being an independent company," said Mr. Palmieri in a Wall Street Journal interview.

The biggest problem for RIM is that it seems its executives have already publicly criticized Apple (News - Alert) and Google for overpaying for their mobile-advertising acquisitions. Paying more than they believe Millennial is worth is treading on dangerous ground.

The true conundrum for RIM, however, is not an attempt to save face, but rather the company’s loss of market share where consumers are concerned. RIM has enjoyed its leading role in the corporate end of the smartphone market, yet Apple and Google are driving intense competition on the consumer side. For RIM to continue to push for success, it has to be able to leverage the same revenue-generating opportunities as its main competition or get ready for second place.

In other RIM news, the company announced – along with AT&T (News - Alert) – the new BlackBerry Torch 9800 smartphone. This new device features the Blackberry 6 operating system and is the world's first smartphone to combine a BlackBerry keyboard with a full touch screen experience.The BlackBerry Torch is the first BlackBerry smartphone to launch with BlackBerry 6, a new operating system that retains the features of the BlackBerry brand while delivering a fresh approach.

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Patrick Barnard





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