AOL snares Third Screen Media: Move underscores rising importance of mobile advertising

Third Screen Media finally found a well-heeled suitor.
The Boston-based mobile advertising startup was acquired by Time Warner Inc.’s AOL Internet division for an undisclosed sum. Third Screen will operate as a subsidiary of AOL’s Advertising.com business, which the Internet giant acquired three years ago.
“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 AOL CEO Randy Falco. “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.”
One of the earliest-and most influential-players in the mobile advertising space, Third Screen delivers marketing efforts via text messaging and on the wireless Web. The company had reportedly been in acquisition talks with Microsoft Corp. last year; rumors of an AOL tie-up surfaced several months ago.
Microsoft earlier this month picked up ScreenTonic SA, a Paris-based mobile advertising firm with several European carrier partners.
AOL’s move underscores the increasing importance U.S. advertisers are placing on mobile. Wireless advertising in the United States is expected to grow from $221 million last year to $4.7 million in 2011, according to eMarketer, and the global market will reach $11.3 billion in the next five years.
“Advertising.com has long been the advertising network to watch, and Third Screen Media broke new ground in the mobile advertising space with our pioneering technology and industry-leading mobile network,” said Third Screen CEO and founder Thomas Burgess. “Together, we can now offer advertisers and publishers a comprehensive suite of interactive advertising solutions for every type of device, platform and program.”
At least a half-dozen U.S. startups have joined the mobile advertising playing field in the past two years, including Millennial Media Inc. and AdMob Inc. Analysts expect more consolidation in the space as mainstream ad agencies and brands incorporate wireless into their overall advertising strategies.