Last month Google bought AdMob for a whopping $750 million.

Now information is swirling around about the Apple Tablet. How will Apple deal with publishers and advertisers?

The answer according to multiple industry sources is to buy Quattro Wireless for this months big announcement in San Francisco. Apple is said to be buying Quattro for an estimated $280m.  Word is now from Kara Swisher that they might be announcing tomorrow.

Quattro Wireless has been some what of a stumbler compared to the leaders like AdMob (now Google) and Millennial Media. Quattro Wireless CEO has been publicly saying that they will sell at the first offer and it’s common knowledge that they are shopping around. Quattro has been shifty in their execution and have changed their business model a few times – moving from building mobile sites for publishers, to exclusive ad serving, to now brand focused.

Quattro has also had trouble raising money. According to a industry venture capitalist their last round was an inside round and only $10m. Note: inside round means that no one would invest in the management team and company so existing investors have to pony up. It’s a vote of no confidence for the company. Now on the heals of the AdMob sale to Google. Quattro is smart to sell.

This leaves Google, Apple, and Millennial Media as the BIG THREE in mobile advertising.

What Does Apple Get: Pump Up The Tablet

Apple gets a player in the mobile ad business that would be a nice fit with the Tablet being introduced this month. Also, Apple would get a bargain in terms of price since Quattro is only doing $20m in annual revenue according to IDC. Therefore, I don’t expect Quattro to fetch as much as AdMob which is why the price being talked about is $280m. Apple gets publisher and advertising friendly team since Quattro is seen as more of a services play with publishers and carriers than actual technology.

The big upshot would be that Apple would get mediation at the carrier level. This could help them big time as Apple moves off of AT&T and possibly syndicate their very popular game changing App Store.

Apple gets:

– Mobile advertising solution at a bargain price
– Services play for carrier mediation important for iPhone and Tablet deals
– Big boost to the App Store with Quattro’s relationships with publishers and advertisers
– Possibility to push Apple App Store to other carriers
– Access to tons of content and ads for their devices and App Store

Other Horses in the Race

Hear are the other companies that were in the running for Quattro Wireless:

Carriers:   AT&T and Qualcomm

Handsets: Nokia and RIM

Portals/Publishers/Ad Conglomerates: CBS, Yahoo, Microsoft, WPP (Advertising Holding Company)

Industry Reconfiguration – The Result

The mobile ad market now has a new configuration – The Big Three:  Google, Apple, and Millennial Media

We featured Millennial Media earlier in the year.  We all know about Google and Apple, but Millennial Media is still a relatively unknown player – not anymore they are among giants in the Big Three category.  Millennial Media is now not just a giant, but the giant, completely overshadowing all the other players in the mobile app startup monetization world.

Millennial Media is the mobile web version of DoubleClick.  Doubleclick maintained their independence during web 1.0 and went on to be worth billions.  Millennial Media doesn’t have to sell.  They are part of the fastest growing and most important market surrounded by big players all content with the new market and stable configuration.  Stabillty yields scale and that is what we will see.

The big winners in this consolidation is Google, Apple, and Millennial and as a result advertisers and publishers will benefit from standardization and stability.