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Wednesday, November 11, 2009, 06:10 am PT (09:10 am ET)

Google to have larger iPhone ad presence with AdMob acquisition

Google's purchase of AdMob Inc. will make it the Internet's largest mobile advertising company, and CEO Eric Schmidt said the acquisition will allow Google to have a presence in more iPhone applications.

AdMob currently sells advertisements that appear in popular free iPhone App Store software like Yelp and Tap Tap. Schmidt told Bloomberg that he would like to see expanded ad-supported content on Google's Android mobile operating system, much like on Apple's handset.

"One the key success points for the iPhone was this enormous development of apps, and particularly free apps, which are advertising supported," Schmidt said. "Now that we have our Android platform coming out, and really with some serious partners behind it, it will also be important to have that be true for Android as well as the others."

The AdMob acquisition will help Google enter a market on the iPhone where it has only tested the waters so far. Google began a revenue-sharing pilot program to place targeted advertising in applications in June. But Schmidt said that mobile revenue is growing faster than regular revenue, and Google wants to expand its role even further in the mobile phone space.

The $750 million purchase of AdMob, announced this week, is the third-largest acquisition in Google history, behind only the $3.2 billion purchase of DoubleClick — another online advertiser — in 2008, and the $1.65 billion takeover of YouTube in 2006.

Google's presence on the iPhone outside of advertising is already large, with the YouTube and Maps applications as native software on the platform. The search giant also has a number of additional applications available for download on the App Store, including Google Earth and Google Mobile.

Google would like to have an even larger presence on the iPhone, but a number of disputes with Apple have led to the appearance of tension between the two technology companies. Apple's non-acceptance of the Google Voice telephony application led to an FCC investigation into the role each company played. Apple and Google also publicly traded barbs over whether the App Store submission was not accepted or flat-out rejected.

As Google looks to grow in advertising and applications on the iPhone, its Android mobile operating system continues to expand to a number of handsets as it aims to compete with the iPhone. Most recently, the much-hyped Motorola Droid was released on Verizon and earned positive reviews.