The all-stock deal, which is expected to close in the next few months, is Google’s most expensive purchase since it bought online ad service DoubleClick for $3.2bn (£1.9bn) in March 2008.
AdMob will help Google deliver more mobile display advertising, in a shift away from its traditional text-based ads connected to search requests.
The company was founded by chief executive Omar Hamoui, 32, less than four years and now serves up hundreds of millions of ads each across roughly 15,000 sites accessible over mobile phones. Its advertisers include Coca-Cola, Ford and Procter & Gamble. All AdMob’s 140 employees plan to join Google as part of the acqusition.
Susan Wojcicki, the company’s vice president of product management, says “this helps us supercharge our products and really helps us accelerate them.”