Late last month we reviewed the Business Model of a startup from India InMobi – competing with Global Technology Giants in the mobile Advertising Vertical. WE would like to peek into how the company is staying competitive to wade off competition from Google and Apple and continue to grow stronger in the space.
InMobi has seen a favorable environment between 2008 and now, the world has changed in terms of mobile internet. Devices have become cheap, internet speeds are increasing, costs are coming down, application ecosystem is growing at a rapid pace, and user patterns have changed.
Global Competitors in Mobile Ad Market – Google is the largest with adMob [Acquired Company]. InMobi is the second largest in the world. Then, there is no other global player worth speaking of and there are just few smaller regional players. Compare this to 800+ Web based Advertising Networks alone in the United States InMobi is not worried about competition as the vertical is growing rapidly and has foot soldiers in 12 countries. Most of the regional players have a presence in only one country.
Global Online Advertising market is about US$60bn market. Out of this, the mobile advertising market is small at about US$2.5bn–US$3bn. InMobi believes that by 2014, this should reach about US$20bn.
Key Entry Barriers in Mobile Ads – Unlike a PC, one cannot enter this business by buying space from a few publishers. The publishers are fragmented. inMobi has about 10,000 publishers. Not all are of the same size but losing a few does not cause a major dent like it would in a PC ad network. Network effects are strong both on the publisher side as well as the developer side.
India vs Silicon Valley Talent – India does not have as much quality talent as the Silicon Valley. InMobi is ruthless and relentless when they are hiring. Hiring has strong network effects to it. If you hire a few good people, a lot more good people will come. Now, they are seeing an influx of more people knocking at our doors wanting to work with us. There are very passionate people who have come over and joined InMobi.
InMobi is targeting to achieve a Top-Line of USD 1 Bn within the next 3 years. Can they do it ?