MoneyWatch Tech

Apple to Buy Wireless Ad Co, Maybe Compulsory Viewing Is Coming

By Erik Sherman

Updated on: January 5, 2010 / 9:57 AM EST / MoneyWatch

According to All Things Digital, Apple (AAPL) could announce as soon as today that it is purchasing wireless advertising company Quattro Wireless. The interest in mobile advertising is expanding and fits a pattern suggesting that advertising revenue fits into the company's developing strategic view as a new growth area much as songs and iTunes became and important money generator.

In this case, several sources apparently confirmed that Apple would buy Quattro for $275 million. Why it would be interested seems clear:

Apple is a major player in smartphones, which means it's one of the big owners of platforms to display ads.
It's clear from Google's (GOOG) success that there's lots of money to be made in advertising, and Eric Schmidt has been clear in his view that mobile ads are critical to the company's future.
Until recently, Schmidt was on Apple's board, so the ad influence was likely there.
Apple, being the control freak entity that it is, would want to own all parts of the ad mechanism.
There was that little patent application for an OS-level system that would disable functions until people responded to an ad.

Oh, yes, Apple is strongly interested in mobile advertising. You can only sell someone so many iPhones, iPods, and Macs, especially as the first in the list is starting to get some heavy competition. But if you can charge for ads on the device, and maybe even force the person to watch, then there's another whole set of queues at the bank tellers. Plus, there are the rumors of an upcoming Apple tablet that some are guessing would be around a grand. That still makes it a pricey device. But combine ad-powered subsidies, and you might have a device that would sell through a wireless carrier and see enough money coming in to give you the ad bucks, the hardware cost, and a thick slice of the monthly service revenue.

Image via stock.xchng user nosheep, site standard license.