Sprint sells mobile ad business Pinsight Media to InMobi

eMarketer predicts mobile advertising will grow to a huge business by 2020. (eMarketer)

Sprint announced it is selling its mobile advertising company, Pinsight Media, to mobile ad company InMobi. Terms of the deal were not disclosed.

The transaction is notable considering Sprint is in the midst of attempting to merge with T-Mobile in a transaction that still needs regulatory approval. And Sprint’s sale of Pinsight comes shortly after a high-profile leak of the kind of location and user data that Pinsight uses for some of its advertising products.

Importantly, Sprint positioned the sale as a move to form closer ties with InMobi.

"Sprint's partnership with InMobi goes beyond this acquisition. We have been looking for a strategic partner that can deliver the latest digital marketing and mobile advertising technologies, besides having a deep appreciation of regulatory, privacy, and data concerns," said Rob Roy, Sprint’s chief digital officer, in a release. "This partnership provides Sprint with an innovative partner for driving our marketing success."

"This industry-first acquisition allows InMobi and Sprint to work on our respective strengths together, and provides a global template for partnerships between advertising platforms and telcos,” added InMobi CEO Naveen Tewari in the release.

InMobi said it will expand its operations in North America to Kansas City as part of the transaction. The company said the purchase follows its acquisition of AerServ for $90 million earlier this year, and its recent partnership with Microsoft.

The kind of network-level data used by Sprint’s Pinsight has been cited by other wireless providers as central to their strategy. AT&T, for example, has said it plans to use location and behavior data skimmed from its mobile network in its new Xandr advertising company—an operation that in part stems from AT&T’s purchase of Time Warner.

Further, the use of that mobile network data reportedly formed a schism between AOL’s Tim Armstrong and Verizon’s management. According to a report in the Wall Street Journal in September, Verizon agreed to share with Armstrong’s Oath business the anonymous information it had on subscribers’ age, gender, phone language and data plan size, but would not share data on the apps customers used and their web browsing activity, unless users explicitly opted in.

Shortly after the report, Armstrong said he would leave Verizon at the end of this year.

The network-level location and behavior data on mobile customers that is available through such mobile network analytics continues to generate concerns. For example, a recent hack into the website of a company called LocationSmart reportedly allowed anyone to obtain real-time location information for any mobile device from AT&T, Verizon, T-Mobile and Sprint. As reported by security researcher Brian Krebs and ZDNet, an “elementary bug” on the try-it-before-you-buy-it page on LocationSmart’s website could be exploited so that anyone could essentially obtain real-time location information on everyone who is carrying their phone in their pocket.

Most of the nation’s wireless network operators pledged to shore up their location information following the report of the hack.

As for InMobi, the company appears poised to continue to use the kind of network-level data that Pinsight obtained from Sprint.

"InMobi is deeply committed to telco partners and building a unique data ecosystem to support our enterprise platform for marketers," said Anurakt Jain, VP and GM of strategic data partnerships at InMobi, in the company’s release. "The acquisition of Pinsight Media significantly enhances our ability to deliver intelligent consumer insights, audiences  and customer engagement for CMOs."

However, InMobi in response to questions from FierceWireless said that "Pinsight business has been and will continue to run in accordance with applicable privacy and data protection laws and applicable regulatory guidelines."

Sprint, for its part, said that "Sprint’s customer data is not a component of the sale. A portion of Pinsight’s technical operations and some employees will transfer to InMobi. As part of the ongoing commercial arrangement between InMobi and Sprint, InMobi will have access to aggregated anonymized data from Sprint and other third parties. We also intend to partner with InMobi on future projects."

Indeed, looming over the issue of Sprint's sale of Pinsight is a prediction by market research firm eMarketer that advertisers will spend more on mobile advertising than traditional TV advertising this year. The firm said that, by 2020, the mobile channel will represent 43% of total media ad spending in the U.S.—a greater percentage than all traditional media combined.

Sprint’s sale of Pinsight may have been in the planning stages since at least March, however. Kevin McGinnis, a longtime Sprint executive who founded Pinsight, left the business in March.

Article updated Oct. 17 with comments from InMobi. Article updated Oct. 18 with comment from Sprint.