The days of sticking up a sign to advertise may not be gone, but they sure are fading and taking a backseat to more modern, or dare say futuristic, approaches. Mobile devices are still growing in leaps and bounds and acquisitions such as Google just gobbling up Motorola Mobility for over $12 billion U.S. demonstrate the direction that industry leaders still believe the trend is heading for the on-the-go world, especially regarding generating advertising revenue.
Advertising and marketing are, of course, keys to success in all markets and if the world is going to continue to go mobile, then advertising is going right along with it; that’s for sure.
A study published in 2009 by Mobile Marketer showed that the world market for mobile marketing and advertising is projected to reach $50 billion U.S. by 2014, up from $29 billion U.S. in 2009. Certainly, $50 billion U.S. is a substantial figure, but given the fact that many are considering mobile marketing the "next great frontier," that number could seem paltry in the next decade or so.
While most have heard of Google, Microsoft or even Eastman Kodak and are aware of ongoing debates over who will acquire whom next for the intellectual properties, there are firms out there that are lesser-known, but still may represent a significant opportunity. One such company is Augme Technologies, Inc. (OTCBB:AUGT), a New York-based firm and premier mobile marketing provider for brands, agencies, media and pharmaceutical/health companies, that has been positioning itself to capitalize heavily on the marketing industry trend shift towards mobile communications.
While some may consider Augme -- and perhaps justifiably so -- a potential acquisition candidate, Augme is not sitting still and waiting for something like that to happen as it is buying up other companies to acquire their cutting-edge intellectual properties as well as their highly experienced executives when desired.
In July, Augme Technologies acquired JagTag for $5.5 million U.S., a start-up that specializes in bar codes and "QR codes." QR codes are a sort of visual shorthand for phone users that mobile marketers have had interest in for years, but still remain in their infancy as to potential uses.
Early on in August, news hit the wire that Augme was at it again, this time going bigger and better with its sights set on mobile marketing and advertising industry leader Hipcricket, Inc.
Today, it was announced that the deal is done. Terms included a purchase price of $44.5 million U.S., comprised of $3 million in cash, a $1-million promissory note, $2 million U.S. to be paid to holders of Hipcricket options, which amount Augme may pay, at its discretion, in either cash or Augme's common stock, and $38.5 million U.S. in Augme's common stock.
In addition, the transaction calls for a 12-month earn-out payment to Hipcricket shareholders and employees valued at up to an additional $27.5 million U.S., which may be paid in cash or Augme's common stock at Augme's discretion provided that the transaction remains a tax-free reorganization. Augme expects to retain all of Hipcricket's employees, and the current Hipcricket team will continue to service Hipcricket's customers.
Augme is certainly being aggressive and definitely spending some cash, but appears to be building an industry force in the booming, yet still blossoming, mobile marketing arena.
Through recent acquisitions, executives and Board Members cumulatively have over 200 years’ experience related to the industry and the Augme portfolio contains some of the largest, household names in the world as clients. Combine that with their recent gross profit margins reported at 67% for the most recent 12 months ended, and Augme Technologies could be a company that is hitting the radar screen of a great many more investors -- and industry competitors -- in the near term. Proper due diligence is always encouraged.
