Inmobi shuts down offices in Africa and Russia. Because it don’t matter

has had a change of mind when it went back to the drawing board to figure out which markets to chase hard and which not to. Few days ago, the company shut down its offices in Africa and Russia. Meanwhile, signalling a clear change of priorities, the company is beefing up in the US.

According to Inmobi, the decision to pull out of Africa and Russia was part of a routine reassessment of business environment. In other words, perhaps sales weren’t as good as expected.

Africa is often described as a booming mobile market and the company’s decision left us a little confused. We tried to figure out why Inmobi decided to do so, but the company wouldn’t give away much other than the statement it already issued.

“InMobi is committed to supporting emerging markets, where mobile advertising is in the very early stages. Like all successful and growing businesses, we routinely review our business to determine where we need to align investment based upon growth opportunities. Current global market conditions justify changes to the investment levels we make in certain countries in order to best structure the organisation,” the statement said.

The mobile advertising company which raised $200 million from Japan’s Softbank last year will continue to service these markets through centralised sales teams located in our regional centres.

In the US, it has hired former Googler Crid Yu as Vice President and Managing Director of North America. Anne Frisbie, who used to head North America for Inmobi is now the Vice President and general manager of global supply.

So what is this current business environment? It is only logical to want to expand in the US, which has a $363 billion entertainment and media market poised to grow at 6% CAGR till 2016 to reach $490 billion. Countries like Japan, China, Germany and UK are also large markets. Russia has a relatively small E&M market ($17 billion) similar to that of India ($17 billion).  Africa does not figure in the top 15 list. An average consumer in the US spends over $560 on entertainment and media where as its is as low as $54 in Russia and $7 in India. These countries also have a high degree of mobile internet penetration.At present, Japan, China, Korea, Taiwan, Spain, France, Germany, Russsia and Italy figure prominently in its priority list.

The company declined to comment on rumors that said that it was ripe for a takeover by a large Japanese conglomerate. Sherpalo ventures and Kleiner Perkins Caufield & Byers has also invested in the five year old company.

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