By 35% a month lately, according to the ad requests pouring into AdMob's network

Click to enlarge. Other includes HTC Desire, Samsung Moment, Samsung Galaxy and HTC Tatoo. Source: AdMob.

"Traffic from Android devices has increased dramatically over the last year," according to a report issued Friday morning by AdMob, the world's largest purveyor of mobile ads.

In November alone, Android devices accounted for 27% of the hits on AdMob's U.S. ad network, up from 20% in October — a 35% increase in one month.

Of course, AdMob is counting ad requests, not handset sales, so its numbers cannot be used to measure market share in the traditional sense. But its reports do provide a monthly snapshot of where the rapidly expanding smartphone market is headed. The growth in Android traffic — fueled by the release of new Android-powered devices — is one of the featured themes of AdMob's November report.

Among its Android-related findings:

• Six months ago a single Android device, the HTC Dream (G1), generated 92% of Android traffic, while in November 2009 the G1 accounted for only 37% of requests.
• The Motorola Droid, HTC Magic and HTC Hero generated 22%, 21% and 9% of Android requests worldwide in November 2009, respectively.
• In November, 88% of Android traffic in the AdMob network was generated in the U.S. The U.K. was with second largest market with 4% of requests.
• In the U.S., the Motorola (MOT) Droid quickly became the No. 2 Android handset, thanks in part to heavy marketing by Verizon (VZ). In the U.K., the HTC Dream, HTC Magic, and HTC Hero make up 92% of Android requests.

AdMob was acquired by Google (GOOG) in November for $750 million shortly after Apple (AAPL) had reportedly expressed interest in buying its network. You can download its November report as a pdf from metrics.admob.com.

See also:

• Where in the world are Apple's 78 million handsets?
• The smartphone wars, one year later

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Mostly in the U.S., but Japan, France, Australia and China are coming on fast, says AdMob

Click to enlarge. Source: AdMob

By the end of December, according to Piper Jaffray's Gene Munster, Apple's (AAPL) will have sold 78 million iPhones and iPod touches worldwide.

So where, exactly, are those devices?

A report issued Friday by AdMob, the world's leading supplier of mobile ads, tries to map the location of Apple's handsets country by country based on the number of users who requested at least one of its ads in November — a number that increased 150% in 2009.

Among the highlights of its findings:

• In November, 50% of unique Apple visitors were located in the United States. The next four biggest markets were the U.K., France, Canada and Germany.
• In total, 23 countries had more than 100,000 unique Apple visitors.
• 50% of unique Apple users were located outside of the US, up from 39% in January 2009.
• The iPhone accounted for 71% and the iPod touch 29% of the total unique Apple users in November. In raw numbers: 18.0 million iPhones; 7.3 million iPod touches; 25.2 million total.
• The fastest growing countries between January 2009 and November 2009 were Japan, France, Australia and China. See the bar graph below.

Source: AdMob

AdMob describes itself as the world's largest mobile advertising platform, serving banner and text link ads on 15,000 mobile Web sites and iPhone and Android applications. Its reports are based on  handset and operator data on nearly 138 billion impressions. They do not, however, measure mobile markets in the traditional sense of number of handsets sold. And they have a bias toward devices like the iPhone and Droid that visit ad-supported websites and also run ad-supported apps.

You can download their November report as a pdf from metrics.admob.com.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

The iPhone leads the pack, Android is gaining, everybody else is losing share

Click to enlarge. Source: AdMob

It's been a year since Google (GOOG) released Android OS, the open-source smartphone operating system widely perceived as the most likely to overtake Apple's (AAPL) iPhone in the long run.

As it happens, Google this month also purchased AdMob, the world's largest purveyor of mobile phone advertising. So this seemed as good a time as any to take a snapshot of the changing smartphone marketplace, as measured by ad requests to AdMob's network.

We reviewed a year's worth of AdMob data — including the October numbers released Monday — and charted it on the graph at right (reproduced full-size below the fold).

There's a bias in the data, since AdMob ads run better on iPhone OS and Android devices than on, say, Research in Motion (RIMM) BlackBerries. But the trends are clear.

Over the past year, Nokia's (NOK) Symbian has lost the largest raw market share, down to 25% last month from 59% the same month a year earlier. In percentage terms, Windows Mobile (MSFT) is the biggest loser, down 70% in 12 months, with Symbian, Palm's (PALM) Web OS and BlackBerry OS close behind.

These numbers are based on worldwide ad requests. Apple's lead is even greater when AdMob zeroes in on the U.S. and U.K. markets. For a look at how the iPhone's share of the U.S. and worldwide markets have grown, see the chart prepared by MacRumors' Erik Slivka here.

Below the fold: A full-size fever chart of AdMob's worldwide data for all the major smartphone operating systems.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Source: AdMob

Deal for AdMob accelerates scramble for a whopping $416 million in revenue.

As was trumpeted across the Internet Monday, Google (GOOG) is buying mobile display advertising startup AdMob for $750 million in (increasingly) precious Google stock. Wall Street digested the news and sent Google stock up almost $11.

Citi analyst Mark Mahaney says the deal “makes sense, because Google is moving aggressively to take advantage of the strong growth opportunity in mobile, which is fueled by smartphones.” Sandeep Aggarwal at Collins Stewart likes the deal, arguing “mobile advertising will be a $4 billion revenue opportunity by 2012-2013.”

Over my dead BlackBerry.

OK, I am in agreement that the whole smartphone movement is big, really big. But the ads on them? They are small, really small. In its own FAQ on the deal, Google brass acknowledge that mobile advertising is pint-sized today. They cite a number from eMarketer that pegs spending on mobile advertising at $416 million in 2009. That compares to the nearly $24 billion spent overall on online advertising.

It is true that $416 million ain’t chump-change, but it’s not Google dollars either. Estimates for AdMob’s gross revenue are in the neighborhood of $50 to 75 million, with a net of around $20 million. That is tiny, but presumably it will grow fast once AdMob’s display ads and universe of publishers and advertisers can plug into Google’s AdSense. But let’s get back to that small thing.

If you think online display ads are at best an annoyance on a 30-inch monitor, what about a three-inch screen? Ignoring ads on a PC is easy enough; on something I pay $60 or $80 a month for (especially if serving up the mobile ads slow my wireless network even more) ignoring the ads will be the default mode. Yes, there will be location-based bells and whistles to go along with the mobile ads — 30% off a ham sandwich and shoe-repair 30 feet from where you are standing — but that is still a ways off, and do you really want mobile coupons? Mobile advertising has been one of those things that gets promised year after year, and never seems to quite materialize (sort of like true broadband in the United States).

The mobile Internet is happening, and fast, the iPhone has shown us that. Whether an advertising experience works well enough on smartphones to really move the needle (and not simply cannibalize the non-mobile online ad world) remains to be seen.

Google: Buy vs. build

And by the way, Google knows how big this mobile Internet thing is going to be. Why couldn’t they figure it out, and save the $750 million? They have buildings filled with very smart people, and a good culture of “rolling their own,” as it were. I guess if your stock is up 83% since the beginning of the year you don’t have to sweat that too much.

Respect to AdMob for getting this deal done (barring any regulatory issues). Big ups to Sequoia Capital, Accel Partners and Draper Fisher Jurvetson who will make a bundle on the acquisition (and LiveOps CEO Maynard Webb who invested his own eBay money in AdMob). AdMob is clearly running fastest in this new mobile advertising world, and Google has the money to pull them off the startup track and install their 140 employees at the Googleplex. It seems there are plenty of Odwalla smoothies to go around, but I wonder, when will the big mobile advertising dollars arrive?

—

By Jon Fortt, senior writer

AdMob CEO Omar Hamoui doesn’t take himself too seriously. When I had lunch with him recently and he eyed the gourmet burgers on the menu, he had no qualms about asking one of his employees what aioli is. (It’s garlic mayonnaise.)

He shrugged and explained that he usually grabs a cheap sandwich, so he’s not used to the cloth napkin fare.

Hamoui’s easygoing manner shows in other areas. He doesn’t have an office in AdMob’s modest San Mateo headquarters — in fact, he doesn’t even have a cubicle. He works at one end of a row of computers, shoulder-to-shoulder with other engineers.

As you’ve read above, my colleague Michael Copeland is a bit down on Google’s decision to purchase AdMob for $750 million. Let me quickly offer another view. I think the AdMob deal is both a great business move and a signal that Hamoui can still fit in at Google — because the search giant is levelheaded enough to swallow its pride when it matters.

Let me explain. AdMob’s approach to mobile advertising is starkly different from Google’s. While Google has tried to squeeze its wildly successful PC-centric advertising onto the phone, AdMob has built a custom system that treats the phone as a unique sort of device. The differences between Google and AdMob were more than academic; they sometimes led to flare-ups between two passionate competitors. (Kind of like Copeland and me.)

A couple of sparks actually flew at Fortune’s Brainstorm Tech conference this past July. During my “Future of Mobile” breakfast roundtable, Google engineering VP Vic Gundotra argued that Google’s approach to mobile ads was superior. Hamoui listened quietly before offering a rebuttal. But in the audience, under his breath, AdMob executive Jason Spero used some colorful language to inform his neighbors that Google was full of it.

Right after breakfast, Gundotra confronted Spero. A Google employee nearby had picked up Spero's comments on her audio recorder, he said — and he casually suggested that if the recording ended up online, it could make AdMob look pretty bad. The clear implication: Watch what you say about us.

Less than four months later, bygones are bygones. Google executives realized AdMob is better positioned in the must-win mobile market, and decided to pay up before AdMob gets even more expensive — or worse, gets acquired by Microsoft (MSFT) or Yahoo (YHOO).

Sure, you could look at this as evidence of a problem. You could argue that Google has an expensive habit of failing to build the best products in new markets like online video and mobile ads, and getting outsmarted by spry startups.

But here’s another take: Google knows how to pick its battles. CEO Eric Schmidt has openly declared that mobile advertising is a key piece of his growth strategy, with the potential to be as big as Google’s core PC-based business. If Schmidt believes that, it doesn’t matter that AdMob’s revenues are small today — what matters is that AdMob has the right people and the right technology to win in mobile.

A storied financier of startups expands — but its new businesses have yet to take root.

A year ago, when venture capital firm Sequoia Capital ordered its portfolio companies to slash costs in the face of a sick economy, even healthy businesses, such as LinkedIn and Zappos.com, complied.

As word of the edict spread, many non-Sequoia startups also trimmed their budgets — a testament to the venture firm's influence in Silicon Valley and beyond. In its 35 years in business Sequoia had nurtured the likes of Atari, Apple (AAPL), Cisco (CSCO), Yahoo (YHOO), and Google (GOOG). If it was bracing for the worst, the situation must be serious.

But just as Sequoia was commanding its upstarts to contract, the firm was plotting an ambitious expansion of its own. Throughout 2008 and into this year Sequoia tried entering entirely new businesses, hiring professional investors to build a hedge fund, as well as an asset-management group that would mimic the wealth-preservation approach popularized by major university endowments.

Sequoia has said little publicly about these new initiatives. Its preeminent partner, Michael Moritz, wouldn't comment. He has good reason to remain mum: Both the hedge fund and endowment-like offering are off to exceedingly slow starts. The new initiatives have failed to attract a sufficient number of outside investors or even retain their initial high-profile employees.

More ominously, a nagging question lurks behind Sequoia's entrepreneurial aspirations: What does it say about Sequoia's commitment to the venture capital industry it helped invent if its partners are busy plotting entry into two corners of the financial services world in which Sequoia hasn't the slightest bit of experience? In short, do Sequoia's imperial ambitions confirm the venture world's worst fears, that its best days are behind it?

Sequoia is hardly the only VC firm that is straying from its roots. Kleiner Perkins, which successfully seeded the public-private investment firm Integral Capital Partners nearly 20 years ago, has been busily focusing on "growth" and alternative-energy funds. New Enterprise Associates, a firm based in California and Baltimore, manages so many billions of dollars that it can't possibly be considered merely a VC operation anymore. Sequoia itself had already broadened its offerings geographically with funds in Israel, India, and China.

What's unique about Sequoia's latest foray is the aggressiveness with which it has been expanding beyond the strategy that made it great. Sequoia began business in 1972 as a spinoff of Capital Group, the legendary fund management group in Los Angeles.

And for almost three decades Sequoia stuck mainly with venture investments. Even as its renown grew, Sequoia remained relatively small and focused. It put money into small, risky tech companies, and the size of its venture funds remained in the $400 million range, far below what competing firms raised. But this approach limited the fees Sequoia partners could earn — and the firm's profit potential.

A few years ago, according to people in the know, Sequoia's partners — chiefly Moritz and the other most senior active partner, Doug Leone — became convinced Sequoia needed to do more if it was to survive well into the future. Venture had passed through a golden age of relatively easy "exits" in the form of ubiquitous public offerings or sales to major tech companies. What's more, the partners had accumulated immense wealth and weren't satisfied with the various professionals offering to manage their money.

In 2008 Sequoia made its move. It hired Michael Beckwith, a seasoned hedge fund manager from Maverick Capital, a Dallas-based money management firm, and Eric Upin, the chief investment officer of Stanford's endowment.

The plan was to raise two new pools of capital from Sequoia's network — endowment investors in Sequoia's venture funds, entrepreneurs whom Sequoia had helped become rich, and Sequoia's partners themselves.

Its pitch? Sequoia's existing funds would benefit from increased exposure to public-securities investments and the new clients recruited by the asset-management product, dubbed the Heritage Fund.

Sequoia's timing couldn't have been worse. Its expansion coincided with the worldwide financial meltdown — not a great time for a VC-turned-money-management-firm to raise funds. Without funds to manage, Beckwith and Upin left, the former back to his old firm and the latter to Makena Capital, an existing multibillion-dollar fund pursuing precisely the wealth-preservation strategy Sequoia coveted.

Sequoia hasn't given up on its dreams, say people close to the firm. But it has scaled back its ambitions. Earlier in the year the firm abandoned swank office space in downtown San Francisco that was intended to house the Heritage staff, subletting the offices to a law firm.

The performance of Sequoia's core business is a mixed bag. It has had some nice exits: Battery maker A123 Systems (AONE) went public in September and is now worth more than $2 billion. Earlier this year Zappos.com agreed to sell to Amazon.com (AMZN), and Cisco last year bought videocamera maker Pure Digital for $590 million. A potential home run is LinkedIn, whose investors have assigned it a billion-dollar valuation.

Yet in its most recent venture fund there isn't one investment with the trademark Sequoia buzz. Some look promising, like mobile ad firm AdMob and Sugar Publishing, a producer of web content for women.

Others are duds, including online media companies Imeem and Joost. Sequoia notably isn't invested in the hottest Internet companies of the moment, Facebook and Twitter, both of which seem, for now, to be gushers for their early venture backers.

True to form, Sequoia isn't panicking. In September it gathered a group of friendly entrepreneurs and investing partners to update them on the firm's progress. Moritz told the group that Sequoia remains committed to financing small, risky technology companies, with nary a mention of the new funds. Who would have thought Sequoia's chanciest venture would have been its own?

Apple (AAPL), for reasons known only to itself, does not report the number of iPod touches it has sold.

But it lets you do the math, and on Tuesday COO Tim Cook casually mentioned, in response to a question about the App Store, that the total installed base of iPhones (26.4 million) plus iPod touches (X) is now 45 million.

So where are those 18.6 million iPod touches?

Nearly 12 million are in the United States, according to a report on the geographical distribution of Apple mobile devices issued Thursday morning by AdMob, the leading mobile ad platform. That makes sense, given that Americans buy the lion's share of all Apple handsets, and the company has been particularly aggressive about marketing the iPod touch to U.S. students in its back-to-school computer sales.

But if you look at AdMob's region-by-region breakdown, the iPod touch is surprisingly popular overseas.

In Latin America, for example, the ratio of iPhones to iPod touches is virtually identical to North America's. Apple has sold more than 327,000 in Mexico alone, according to AdMob's estimates, which apparently is more than the total number of iPhones sold in that country.

iPod touches are even more popular in Canada. According to AdMob, Canadians have purchased more than 1.36 million iPod touches but only 805,594 iPhones.

iPod touch sales are also strong, relative to iPhone sales, in Oceania, Asia and Western Europe. The device is less popular in Africa and least popular in Eastern Europe.

Wordwide, according to AdMob, the ratio of iPhones to iPod touches on its network in June was roughly 2 to 1. In other words, iPhones represented 68% of Apple handsets and the iPod touch made up the other 32%. This ratio has remained constant over the last several months, according to AdMob, implying a similar growth rate for both devices worldwide.

Below: AdMob's country-by-country iPod touch sales estimates, obtained by multiplying AdMob user shares in each country by the total number of iPod touches sold.

Here's the comparable chart for iPhones.

AdMob describes itself as the world's largest mobile advertising platform, serving banner and text link ads on mobile web pages for more than 7,000 publishers. It collects handset and operator data on each of the nearly 95 billion ads it has served since 2006, which enables it to produce charts like these.

For a pdf of the full report, click here.

See the blue slice in the pie chart at right? It represents the iPhone's share of U.S. smartphone traffic on the network maintained by AdMob, one of the companies that run those little ads that appear on the screen of your mobile phone.

We've been watching that slice grow over the past few months. In February it covered 51% of the pie. By April it had grown to 59%. And by Thursday morning, when AdMob released the May edition of its U.S. smartphone pie, Apple's (AAPL) share had grown to 69% — a 10 point increase in one month.

Some caveats are in order. This is just one company's view of the mobile Web — albeit the view of world's largest supplier of mobile ads, serving 6.3 billion banner and text ads per month. And it's only a snapshot of the smartphones on the U.S. portion of the AdMob network — although 47.6% of AdMob's traffic comes from the U.S. and 37.3% of that comes from smartphones.

Still, what it suggests is that Apple's domination of the smartphone market — the only part of the cellphone market that has continued to grow in the face of the recession, according to Gartner Research — is accelerating.

How tough this makes it for the competition is even clearer when you look at AdMob's report on the total U.S. handset market — one that includes smartphones, so-called feature phones and devices that aren't phones at all, like the iPod touch. Apple's share of this market, viewed through AdMob requests, is 45.1%, having grown 10.4% between April and May. Most of the other players in the field — including Research in Motion (RIMM), Samsung, Motorola (MOT) and Palm (PALM) — are showing negative growth. We'll be watching next month to see if Palm's share grows once AdMob starts to get data from the Pre.

Below the fold: AdMob's worldwide data, in which Apple's share  (31.4%) and share change (5.2%) are smaller, but the pattern is basically the same. You can see the full report here.

See also:

• The iPhone casts a giant shadow on the Web
• iPhone now represents 51% of U.S. smartphone traffic – report

What — besides a two-year, $2,000-plus commitment to AT&T (T) — makes a person who carries an iPhone different from one who's got an iPod touch?

From January to May, comScore tapped into AdMob's U.S. advertising network to conduct a survey of owners of both Apple (AAPL) mobile devices and drew some interesting conclusions, which it released Tuesday morning.

First, the comScore/AdMob survey, like last week's Forrester report, identified several ways both groups differ from the general population. For example,

• 70% are men
• Half use the mobile Web more than they read newspapers or magazines
• More than 40% use their mobile devices more often than their computers to visit the Internet
• More than 40% spend more time on the mobile Web than they do listening to the radio

But when the researchers drilled into their data, they discovered that iPhone and iPod touch owners occupy very different demographics. For example …

• iPhone owners are older. 69% of iPod touch users are between ages 13-24, while 74% of iPhone users are older than 25
• iPod touch owners are less wealthy. 78% of iPhone users have a household income of $25,000 or more, compared with 66% of iPod touch users
• iPhone owners have more kids. 46% of iPhone users have children while only 28% of iPod touch users do
• iPod touch owners are more likely … to be in the market for cellphones, clothes, TVs and other electronics
• iPhone owners are more likely … to spend money on travel, financial services and a new home

Most of these findings flow directly from the first: iPhone owners are older and therefor have more money, more kids, more need of financial services, etc. (The one thing most don't need is another cellphone.)

And you might think that this age difference flows directly from all those free iPod touches Apple handed out last summer — and will hand out again this summer — to college students buying MacBooks.

But Jason Spero, AdMob's North American managing director, thinks it has more to do with 1) the cost of that two-year commitment to AT&T, and 2) the big advertising campaign Apple ran last December pushing the touch — and the explosion of games that run on it — as the "funnest iPod ever," a campaign clearly pitched to younger users.

Spero says the effect of Apple's marketing push leaped out of their December data: an explosive, almost vertical spike in AdMob's iPod touch Web requests between Dec. 24 and Dec. 25. "The iPod touch became THE gift for Christmas," he says.

ComScore describes itself as a leader in measuring the digital world, and AdMob is the world's largest purveyor of mobile Web ads. ComScore used invitation banners to solicit respondents from AdMob's network and ended up interviewing 3,454 iPhone users and 3,848 iPod touch owners.

See also:

• How are iPhone owners different?
• iPod touch use “exploded” Christmas day

Below the fold: snapshots of the two demographics as reflected in a few of the comScore/AdMob graphics.

Here's a pie chart that should warm Steve Jobs' heart.

That big blue slice covering 59% of the pie represents Apple's (AAPL) share of the U.S. smartphone traffic in April as measured by AdMob, the world's largest purveyor of ads on mobile apps and websites.

By the same measure, Apple also had the lion's share — 43% — of the mobile Web traffic worldwide.

The point of the "AdMob Mobile Metrics Report" for April 2009, released Wednesday morning, was not to give comfort to Apple's CEO. Rather it was to measure the large and growing shadow cast on the Internet by smartphones in general.

It cites a Gartner report that smartphones represented 12% of total mobile sales in 2008, and points out that those devices represented 35% of AdMob's traffic in April — nearly three times their market share.

But Apple's handheld devices — whose Internet shadow is more than five times their share — ended up dominating most of the report's charts. Among the highlights:

• Of the 7.5 billion AdMob ads displayed on mobile devices in 160 countries around the world, 2 billion were displayed on iPhones or iPod touches
• The iPhone OS has only 8% of global smartphone market share, but generates 43% of mobile Web requests and 65% of HTML usage
• In the United States, 20% of ad requests come from iPhones, 14.8% from iPod touches (globally, those numbers are 15.1% and 11%, respectively)
• Apple's share of U.S. ad requests grew 5.6% month over month
• The iPhone's share grew 3% in April; the iPod touch's grew 2.6

Those growth figures for Apple contrast with its competitors, most of whom lost share in the same period, including Motorola (MOT), Research in Motion (RIMM), LG, Kyocera (KYO) and Palm (PALM). The exceptions were Samsung, Nokia (NOK) and HTC, which grew marginally. See charts below the fold.

According to its website, AdMob stores and analyzes every ad request, impression and click from more than 7,000 mobile websites and 1,600 applications every day. Its most recent analysis of all that traffic, issued Wednesday, is available here.

See also:

• iPhone now represents 51% of U.S. smartphone traffic — report
• iPod touch use “exploded” Christmas day

Below the fold: AdMob's Web traffic numbers by manufacturer and model.