Nokia has been steadily building up businesses in the area of mobile advertising, in its ambitious challenge for Google’s crown.

Its latest move is to invest in Madhouse, a mobile ad firm in potentially the world’s largest market within a decade, China.

Nokia’s venture arm, Nokia Growth Partners, has injected an undisclosed sum in the Shanghai-based firm, which operates a network for advertising on sites that support WAP – the basic mobile internet technology, and a protocol that runs in the midrange and low end webphones that are likely to be heavily adopted in China over the next few years.

According to Madhouse, MadNetwork covers 75% of China's total mobile internet traffic. The company claims to have over 1,100 major sites on its system.

Unsurprisingly, Nokia has been vocal about its hopes for China recently, as its mature markets start to suffer from saturation and the fear of economic downturn. Announcing its third quarter results, whose profits were hit by a European slowdown, Nokia talked up the increase in demand for mobile web services and midmarket or even more sophisticated handsets in China and India – economies that are also expected to come out of recession ahead of the mature markets. Paul Asel, managing partner of Nokia's fund in China, said in a statement: "It costs one-fifth the amount to develop a company here. It allows for more efficient innovation."

Earlier this month Google announced that it had allied with China Mobile, the world’s largest cellco by user numbers, to be the first Asian operator to sell Android phones, following the failure of the giant carrier’s attempts to do a deal with HTC for the handset that T-Mobile brands the G1. This will be a useful step for Google in terms of harnessing rising Chinese mobile web demand, since its services are tightly integrated with Android. However, it will have a huge job to compete with Nokia’s established market share and brand, since it has been widening its market lead in both China and India at Motorola’s expense, and as growing middle classes start to adopt midrange and high end phones.

Source:rethink-wireless