Now, hes poised to become Google Inc.s newest weapon as the company aims to extend its dominance of online advertising from computers to mobile devices.
Google is buying Hamouis expertise in a $750 million acquisition of AdMob, a network for ads on iPhones and similar gadgets. He launched the business while struggling to support his wife and children as a student at the University of Pennsylvanias Wharton School.
Hamoui, 32, changed his life by setting up a system for advertising on mobile devices. Though that sounds simple, it was a breakthrough because Hamouis network got around stifling controls that wireless carriers had imposed on the content their customers could see on their phones. The crack that AdMob opened in the carriers “walled gardens” made it easier for independent programmers to profit from applications planted on mobile phones.
“It took a lot of guts because (the carriers) were the gatekeepers of the industry,” says Rich Wong, an AdMob investor and board member who is with Accel Partners. “Back then, it was sort of like if you said no to the Godfather. Bad things could happen.”
More than a year after Hamoui ignited the fuse, Apple Inc. blew up the status quo with the June 2007 introduction of the iPhone – which created a platform for applications chosen by users.
That has spawned more than 100,000 mobile “apps” for doing everything from bird watching to cooking poultry. The revenue from AdMobs ad network is one of the main reasons application developers can give the programs away or just charge a few bucks.
“Omar was absolutely the tip of the spear in this mobile media revolution,” says Jason Spero, general manager of AdMobs North America operations.
If Googles proposed acquisition is approved by the U.S. Federal Trade Commission, Hamoui thinks he and AdMobs 150 employees will be in an even better position to turn mobile phones into moneymaking magnets.
Google is banking on it.
Drawing upon the more than $20 billion in revenue that it generates from Internet ads, Google has been investing aggressively in mobile technology. The Internet search leader has developed a free software system, Android, that runs mobile devices and is experimenting with its own phone, called Nexus One, that could be sold directly to consumers.
Google believes explosive growth in mobile advertising will justify its spending. For now, the market remains relatively small, with U.S. mobile advertising revenue expected to reach $416 million this year, according to the research firm eMarketer Inc.
AdMob has delivered nearly 140 billion ads on mobile Web sites and applications since its inception. That has helped AdMob double its revenue this year after tripling it last year. Hamoui wont be more specific, leaving it to analysts to estimate that AdMobs revenue this year will range between $45 million and $60 million.
Only two of Googles acquisitions have been bigger than the proposed AdMob deal. Regulators quickly approved Googles $1.76 billion acquisition of the Internets top video channel, YouTube, in 2006 but took a year before signing off on the $3.2 billion purchase of another Internet ad service, DoubleClick Inc., in 2008. (By coincidence, AdMob is headquartered across the street from where YouTube started in San Mateo, Calif.)
Google contends its AdMob acquisition wont hurt competition. Among other things, Google points to other mobile ad networks from rivals such as Jumptap, Mojiva and AOL and argues that mobile ads still dont generate attract enough spending to be considered a distinct market.
Hamoui started AdMob out of frustration a few months after he enrolled in graduate school. He was building a phone-friendly Web site to make it easier for people to share photos with their family and friends, but he couldnt seem to attract much traffic.
To get the word out, Hamoui bought ads that would appear alongside certain search results at Google, Yahoo and other engines. That ended up costing him about $30 per referral, which he couldnt afford. So Hamoui decided to try advertising his site on other mobile Web sites, which are specially designed to work with the small screens and technological restraints of mobile phones.
Hamoui found a mobile Web site willing to run his ad for dramatically less money and wound up paying just 10 cents per referral. The experience resonated with Hamouis studies on efficient markets, and inspired him to build a network that would make it easier to advertise on mobile devices.