AOL buys Third Screen Media

BY A CORRESPONDENT

17 May, 2007: AOL of Time Warner Incorporated has bought mobile advertising company Third Screen Media.

The financial terms of the deal are yet to be revealed.

Third Screen Media, the technology of which serves advertisements on text messaging, mobile video and phone-screen formatted pages as well as in downloadable formats, will remain in Boston, the United States, and become a division of AOL’s advertising.com unit.

Randy Falco, chief executive of AOL, has said the deal lets his company offer advertisers a complete set of solutions, from display advertising to search and now a superior set of mobile solutions.

Mobile phones are seen as one of the biggest, potential new growth areas for advertising, but this market has been slow to take off as wireless carriers are just beginning to build their ad strategies, according to a statement from AOL.

Unlike the internet on computers, carriers wield more control over what is offered on cell phone screens. Media and services available from one company, such as Verizon Wireless, may not be available on another, such as AT&T.

Carriers do not like to invite the wrath of their paying customers by giving them a surfeit of unwanted advertisements.

Media and internet companies are pinning hopes for future growth on advertising-supported entertainment on cell phones, devices that users always carry with them.

In recent deals of a similar nature, Microsoft bought ScreenTonic SA, a Europe-based mobile ad company, in May 2007, to expand its own advertising system.

The mobile advertising market in the United States is expected to reach $4.7 billion by 2011, up from $421 million in 2006, according to figures furnished by AOL.

The AOL-Third Screen Media deal helps improve AOL’s capacity to offer several ways for advertisers to reach users of digital gadgets.

The Time Warner division had restructured its business in 2006 and had begun offering most of its services for free to boost online advertisement sales.