AOL acquires TSM amid mobile ad frenzy

Online giant AOL announced it has acquired Third Screen Media, a mobile advertising network and ad-serving and management platform provider that has been one of the early key players in the rapidly evolving mobile advertising market. The company will now operate as a wholly owned subsidiary of AOL's Advertising.com division.

The deal comes barely a week after Microsoft bought its way into the mobile ad space with the acquisition of ScreenTonic. Several other mobile ad-related acquisitions have occurred in the past year.

“AOL is one of only four at-scale advertising businesses on the Internet, and the acquisition of Third Screen Media gives us a very strong position in the fast-growing mobile space,” said Randy Falco, Chairman and CEO of AO, in a statement. “It also lets us offer advertisers a more complete set of solutions, from display advertising to search and now a superior set of mobile solutions.”

Third Screen Media connects advertisers, publishers and mobile phone carriers on a common platform, allowing ads to be managed and delivered via WAP, downloadable applications, SMS, MMS and mobile video.

In the U.S., mobile advertising is expected to grow from $421 million in 2006 to $4.7 billion by 2011, while globally the market is expected to increase to $11.3 billion by the same year, according to eMarketer. In another study, ABU Research said the global market will be worth about $3 billion this year, and if mobile search and video advertising is counted, as much as $19 billion in 2011.