Why is RIM Shopping For a Mobile Ad Network?

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The WSJ is reporting that BlackBerry maker RIM is looking to acquire a mobile ad network to offset their declining market share.

Baltimore-based Millennial Media is said to be the target acquisition but talks have stalled, according to WSJ’s sources. It seems the two sides have a disagreement over MM’s worth. With recent mobile ad networks like AdMob and Quattro Wireless being acquired for $400 to $500 million, the folks at Millennial think they’re worth as much and RIM is unwilling to pay anywhere near that.

This move is a direct reaction to what Google and Apple have done but RIM has no business going after a mobile ad network and the facts reflect that. Sales of the Torch, which Co-CEO Jim Balsillie of RIM said was a “quantum leap over anything that’s out there”, have faltered with retailers slashing the price of the device in half less than two weeks after its launch. Reports indicated that RIM only moved 150,000 units of the Torch in the first 3 days. In contrast, Apple sold over one million units of the iPhone 4 and iPhone 3GS during the same period when both devices first launched.

This wouldn’t even be a stopgap for the company. They need to focus on tightening up their OS and producing hardware that’s remotely lust worthy if they plan to stay relevant or make proper inroads into the consumer sector. According to market research firm IDC, RIM’s global smartphone market share has dropped from 19.1 percent to 17.8 percent.

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