AOL: Mobile ads could grow to $5 bln in 5 years

By Sinead Carew

NEW YORK (Reuters) - The market for advertising on cell phones could grow to $5 billion in five years, with marketers already clamoring for entry into the emerging outlet, AOL's chief executive said on Wednesday.

AOL, the Internet division of Time Warner Inc. (TWX.N: Quote, Profile, Research, Stock Buzz), said earlier this week it had purchased privately held mobile advertising company Third Screen Media, in an effort to capitalize on growing interest in cell phone advertising.

"I think mobile is one of the great growth opportunities, along with global that we have," AOL CEO Randy Falco told the Reuters Global Technology, Media and Telecoms Summit in New York.

Falco cited industry estimates that target revenue from mobile advertising increasing ten-fold in five years from an estimated $500 million to $900 million currently. Falco noted that these were not AOL estimates, but said they were not "crazy" predictions.

"It will certainly be in the $4.5 to $5 billion range in terms of the marketplace," he said. "I think you need to be there. That's money that's coming from some place. It's coming from other media."

Falco also said each time a potential AOL advertising customer meets with his sales department, the customer always asks if AOL can sell mobile advertising space.

"There's clearly a demand for mobile," he said.