InMobi dismisses the rumor it is being bought by Google: 'There is no reason to sell'
In an email sent to employees, reported by The Times of India, InMobi CEO Naveen Tewari said he wanted the company to stay independent.
It read: "We are building an amazing company and the market space is very huge. Given the level of innovation and disruption we are about to cause, there is no reason to sell."The email ended with the line: "If you like the fact that we are not selling, let me hear a big round of applause from the floor."
The office erupted into applause, The Times of India reports.
Business Insider has contacted InMobi for comment.
Sources with direct knowledge of the situation had told Business Insider on Wednesday that the deal was off the cards too (although they did confirm that talks had taken place). But the rumored acquisition was the talk of the ad industry earlier this week. We caught up with a bunch of ad tech executives to get their thoughts on the situation.
InMobi is the largest independent mobile advertising player outside of Google and Facebook. The company has more than 900 employees and Business Insider has previously estimated its revenues at $372 million. The company turned profitable in the fourth quarter, according to The New York Times. InMobi claims, in a press release sent to Business Insider last year, that its network reaches 872 million active users, spanning over 200 countries.
Of all the adtech executives we spoke to about the potential deal, the intention from Google was clear: It wants to make a land grab in the mobile space, having lost ground since its $750 million AdMob acquisition in 2009.Ario Paparo, CEO of adtech startup Beeswax, told us: "I think there are a couple of factors at work. First, after a very fast start in mobile ads with the AdMob acquisition, Google has lagged significantly behind Facebook and Twitter's MoPub unit of late in attracting developers to AdSense and AdX as their monetization vehicles. Mobile developers are choosing various other SDKs to include in their apps and it takes quite a bit of effort to stay on top."
A Google acquisition of InMobi "is not perfect"
He added: "My personal opinion is Google wants to jump forward as fast as it can and regain some ground, although not perfect, it will achieve some of those objectives quickly. It is a scale play, Google knows that sometimes this kind of purchase is needed, the idea of building and creating a network is pretty labor intensive as well."
The fact that the InMobi purchase "is not perfect" in terms of answering Google's mobile advertising scale challenge was repeated among the adtech execs we spoke to. While everyone we spoke to agreed Google needs to make this kind of acquisition, many found it difficult answering the question: Why InMobi?
One senior agency source who asked not to be named questioned why Google would look to buy a company of 900 people, mostly sellers and engineers, when Google has plenty of talented sellers and engineers itself - arguably the best in the business.
He also questioned whether InMobi has enough bespoke, patented technology to make a $1 billion deal worthwhile, although he concluded that the appeal may be in the relationships the ad network has with partners and telecoms operators in India - the next burgeoning market for smartphone growth.
"It will be interesting to see what the FTC has to say about this land grab"
An InMobi acquisition would also be a regulatory challenge for Google, according to ChoiceStream's VP of marketing Bill Guild.
He told us: "Unlike the acquisition of AdMob which brought Google squarely into the mobile space, this seems like a simple land grab. Based on the scrutiny that the FTC paid to AdMob and the fact that Google today is a much bigger force in the mobile space than it was then, it will be interesting to see what the FTC has to say about this land grab. Even though InMobi doesn't bring new technology or expertise to Google, the price might be worth it to gain a dominant position in world-wide mobile advertising."With a Google acquisition off the table, InMobi is staying independent for now. Tewari has long-hinted that the company is preparing for an IPO, although that may be some time away as the company has struggled to raise interest from investors beyond Japanese internet company SoftBank. And in 2014, SoftBank wrote down all or a major part of its 2011 $200 million investment in InMobi, according to Next Big What, which did not uncover a reason for the writedown but suggested it could be related to taxation.