Rumor Mill: Amazon in talks to buy Jumptap, launch mobile ad network

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Amazon is reportedly in talks to acquire mobile advertising network Jumptap, a move that would further escalate the digital retailer's ongoing battle with archrival Apple (NASDAQ:AAPL).

Citing sources familiar with the talks, AdAge reports that Amazon has explored acquiring other mobile advertising companies in addition to Jumptap. Both firms declined to comment on the talks. GeekWire notes that Jumptap is based in Cambridge, Mass., where Amazon is opening a new engineering office.

In addition, Amazon recently hired Jamie Wells from Microsoft (NASDAQ:MSFT), where he led global product marketing for mobile display and apps. Wells' LinkedIn page states he is currently hiring candidates for mobile ad sales and marketing positions.

The Jumptap rumor follows two weeks after AdAge reported Amazon plans to expand its Special Offers advertising platform to the Kindle Fire tablet, the company's bestselling product and its alternative to Apple's more expensive iPad. An unnamed ad agency executive said Amazon will roll out Special Offers sponsored screensavers to the Kindle Fire's welcome screen; advertisers must spend about $600,000 for any package that includes Kindle Fire promotion, with all campaigns running for two months. An exec from another agency said Amazon also will offer expanded packages beginning at $1 million.

Amazon's mobile ad value proposition presumably would hinge on the wealth of consumer information and purchase history data at its fingertips. Amazon already leverages online shopping histories to power its own product recommendations; in addition, its Amazon Appstore for Android storefront offers a series of automated marketing features extending its recommendation algorithms to mobile software merchandising.

"With the amount of data Amazon has available, there's a massive opportunity to use that as a pretty powerful targeting technique online and into mobile," Sal Candela, mobile director of media agency PHD, told AdAge.

Apple entered the mobile ad business in early 2010 with an acquisition of its own, purchasing Quattro Wireless for $275 million. Apple's iAd network, optimized for devices running its iOS mobile operating system, launched months later. But iAd has struggled to win business: Insiders say ad agencies are frustrated by Apple's high prices, inflexible contract options and demands for creative control, not to mention rich media formats optimized solely for iOS devices. By comparison, Google's (NASDAQ:GOOG) AdMob and independent Millennial Media run campaigns across multiple operating systems.

As of the end of 2011, iAd controlled 15 percent of the mobile display ad market, according to research firm IDC. AdMob leads with 24 percent market share, followed by Millennial Media at 17 percent.

For more:
- read this AdAge article
- read this GeekWire article

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