InMobi paid for Pinsight Media purchase with stocks
Sprint (S) recently sold its mobile advertising business Pinsight Media just six years after it was created. The sale came at a time when Sprint is awaiting regulators’ decision on its proposal to merge with T-Mobile (TMUS) in a deal valued at more than $26 billion.
Sprint sold Pinsight to InMobi for an undisclosed amount. But it received compensation in the form of stocks, which means Sprint has become a shareholder in InMobi.
InMobi expanding after Pinsight purchase
InMobi is a leading provider of the mobile advertising platform aimed mostly at enterprise customers. InMobi acquired mobile mediation and revenue management provider AerServ in January for $90 million. Six months later, InMobi entered into a deal for cloud-based mobile marketing with Microsoft (MSFT), one of the world’s top cloud computing companies.
InMobi is planning to expand to more markets in North America following its acquisition of Pinsight.
$141 billion in mobile advertising market
Pinsight specializes in mobile ads targeting, which means it helps brands reach the right audience with the right marketing message delivered on a person’s smartphone using data from wireless providers. That kind of ad targeting is thought to have inspired AT&T (T) to buy TimeWarner and AppNexus, leading to its launch of a new advertising unit.
By selling Pinsight in exchange for a stake in InMobi, Sprint is able to remove a non-core operation without forgoing the revenue opportunity in the mobile advertising market. In the United States, the mobile advertising market is expected to generate $141 billion in revenue by 2022, according to eMarketer.
Sprint’s revenue declined 0.4% YoY (year-over-year) in the June quarter, while T-Mobile and Verizon (VZ) grew their revenues 3.5% and 5.4% YoY, respectively. Sprint is expected to report its September results on October 31. The consensus calls for revenue of $8 billion compared to $7.9 billion a year ago.