Microsoft to acquire ScreenTonic

Seattle: Microsoft Corp said on Thursday that it has agreed to acquire European mobile phone advertising company ScreenTonic in order to acquire a foothold in the rapidly growing space of placing ads on mobile phones. It did not disclose any financial details of the deal.

Paris-based ScreenTonic is one of the first companies in Europe to develop a platform to manage and place ads on the mobile Internet. It also serves as an ad agency for companies looking to develop marketing campaigns on cell phones. Investors in the start-up include venture capital firm 3i and I-Source Gestion, as per ScreenTonic''s website.

Mobile phone advertising is still a nascent industry compared to web advertising, but it is an area of significant interest and is being targeted by Microsoft, and its rivals Google Inc. and Yahoo Inc.

Advertising on the Internet, especially pay-per-click ads alongside search results, erupted into a multibillion industry within a few years and online companies hope mobile phones will follow a similar growth trajectory.

As per Steve Berkowitz, senior vice president at Microsoft''s online services group, the acquisition of ScreenTonic will be part of a long-term strategy to deliver ad experiences that map to the mobile Internet.

ABI Research forecast global mobile marketing and advertising will increase sixfold to $19 billion by 2011 from an estimated $3 billion by the end of 2007.

Google, the Web search leader, has built a dominant online advertising business around its search engine, and has strengthened its position by agreeing to acquire online ad supplier DoubleClick for $3.1 billion last month.

Microsoft, which was slow to recognise the power of web advertising, has been playing catch-up by building its own search engine years after Google, and is developing its ad placement system. Its online advertising is still dwarfed by Google.