Mediapost reports today that AOL has agreed to acquire Third Screen Media for an undisclosed sum. The mobile ad firm will now operate as a wholly owned subsidiary of AOL's third-party ad network Advertising.com.
Reports that AOL was after Third Screen for as much as $80 million have circulated since February. (Initial news of the talks came several months after discussions between Third Screen and Microsoft failed, according to published reports.)
The acquisition comes during a period of rapid growth for mobile advertising. U.S. mobile advertising is expected to grow from $421 million in 2006 to $4.7 billion by 2011, according to eMarketer. Worldwide, the market is expected to expand to $11.3 billion by the same year.
Acquisition rumors aside, Third Screen has remained a hot industry name thanks to ad deals with several large companies. Last December, Universal McCann tapped the firm to manage mobile media efforts for clients including Microsoft, Johnson & Johnson and Intel.
Additionally, Third Screen earlier this year struck a deal with MSNBC to sell ads and manage inventory on its mobile site, joining a roster of publishers including Fox News, USA Today, the Weather Channel, CBS SportsLine, and ESPN.
Third Screen Media connects advertisers, publishers and mobile phone carriers on a common platform, allowing ads to be managed and delivered through wireless application protocol, or WAP, downloadable applications, text-messaging, or SMS, multimedia messaging service, or MMS and mobile video.
Advertising.com, has been a major driver of growth for AOL. Analysts recently credited the ad network with helping to drive AOL's first-quarter ad sales up 40% this year compared to the first quarter of last year. And in April, Advertising.com won the privilege to provide display and video ad management services for the yet-unnamed video venture between NBC Universal and News Corp.
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