Google buys mobile ad firm for $750 million

The new Droid phone, a Motorola Inc. and Verizon Wireless phone based on Google Inc's Android 2.0 system, is shown at a media event in New York October 28, 2009.

SAN FRANCISCO (Reuters) - Google Inc is acquiring mobile advertising company AdMob for $750 million, furthering the company's push into the fast-growing market of Web-enabled cell phones.

The all-stock deal gives Google, whose Android software is increasingly used to power smartphones such as the Motorola Inc Droid, an important element to monetize mobile Internet traffic.

Privately held AdMob makes technology for serving display ads on mobile phones and to track the performance of the ads.

"Mobile advertising has enormous potential as a marketing medium and while this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time," said Google VP of Product Management Susan Wojcicki.

Google, the world's No.1 Internet search engine, does not disclose how much of its revenue, which totaled nearly $22 billion in 2008, comes from mobile ads.

Last month, Google said its mobile searches increased 30 percent quarter-over-quarter in the third quarter.

Google CEO Eric Schmidt also said last month that the company was interested in resuming its acquisition efforts, after taking a breather during worst of the economic downturn. Schmidt said Google would acquire on average one company a month.

Google said the deal has been approved by both Google and AdMob and is subject to customary closing conditions.

Google's shares were up 1.8 percent at $561.12 in afternoon trading.

(Reporting by Alexei Oreskovic; editing by Andre Grenon)