Microsoft may be in talks to acquire Third Screen Media, which identifies itself as a “marketing technology” company. If the deal goes through, Microsoft would gain access to technology that can deliver ads to cell phones, as well as the firm’s established customer base. Third Screen Media’s clients include USA Today and the Weather Channel.
This follows Microsoft’s purchase of Massive Inc., a company that provides advertising in videogames. Some analysts suspect Microsoft is trying to cement itself in these advertising fields before competitors such as Google establish a foothold. It is probably also due to the increasing interest in mobile phone content. The Ovum technology consultancy expects mobile ad spending to reach $1.3 billion by 2009, which would be a massive gain from the $45 million spent in 2005.
The financial details of the rumored acquisition talks remain completely unknown. Analysts believe Third Screen Media takes in about $10 million in revenue per year, although the company is growing rapidly. CEO and founder Tom Burgess says the average 2005 ad campaign brought in $35,000, but that this year, a handful have reached the “several hundred thousands” level, with two or three surpassing $1 million. And with almost 200 million cell phone subscribers in America alone, continued growth is expected as advertisers rush to the new market.
Third Screen Media displays about 70 million ads per month. Cell phone ads have generally been little more than text messages up to this point. Banner ads and video commercials are in development, though, and some have already made their way out into the mobile world.
Mobile advertising may not become too abundant, however. “There’s been a hyper-concern that you will offend consumers,” says Paul Reddick, vice president of business development and product innovation for Sprint Nextel Corp. But most people in the field think development will continue in spite of this likelihood.
It looks like more cell phone ads are on the way, and if the Microsoft acquisition of Third Screen Media goes through, the software giant could very well be at the helm of the invasion.
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Doug is a staff writer for Murdok. Visit Murdok for the latest eBusiness news.
