Vodafone, Telefonica bank on mobile ads

Passer-by walks past a Vodafone store in central London, May 30, 2006. Vodafone and Spanish carrier Telefonica are taking stakes in a mobile advertising company in a move to battle the threat of online giants Google and Yahoo .

LONDON (Reuters) - Mobile phone group Vodafone and Spanish carrier Telefonica are taking stakes in a mobile advertising company in a move to battle the threat of online giants Google and Yahoo Inc.

Vodafone Group Plc, the world's largest mobile phone company by revenue, and Spanish telecoms heavyweight Telefonica said on Wednesday they were taking undisclosed minority stakes in Amobee Media Systems, a mobile advertising solutions company.

San Francisco-based Amobee, which has already been signed up by Vodafone in Greece, the Czech Republic and Spain, was founded in May 2005 to provide a platform for advertisements on mobile Internet, games, video and messaging services.

Industry forecaster Informa estimates the global mobile ad market will be worth $11.35 billion by 2011.

Vodafone, which like Telefonica is facing rising competition and falling prices for voice and data services in mature European markets, said it saw a "tremendous opportunity" for brands to target customers directly.

Telefonica said it had run its eye over a number of competing mobile ad platforms but was banking on Amobee's carrier-centric model generating high quality adverts "ensuring that advertisers are given a compelling proposition".

(Reporting by Kirstin Ridley, editing by Will Waterman)