The startup was founded by former investment banker Guilherme Schvartsman, who says Best, Cool & Fun Games is “the #1 mobile gaming company in Latin America, by sales, product breadth, world reach and user satisfaction.” It has released 30 games that have been played by 10 million people. Even though the company based in Brazil, its biggest audience is in the United States, Schvartsman said.

Schvartsman has been developing iPhone games since 2009, and he said one of his key decisions was embracing the “freemium” business model last summer. Until that point, he said, Best, Cool & Fun Games had had some success with games that cost 99 cents. Then it released a free version of its game Ant Smasher, which took advantage of Google’s AdMob ad network in two ways — it ran AdMob ads, but also promoted itself on other apps in the AdMob network. Google encourages this strategy by offering developers a discount if they spend their AdMob ad revenue on AdMob ads.

That turned Ant Smasher into the company’s most popular game by far. It has been in the top 100 games on the iPhone for the past four months and in the top 100 games on Android for the past two months. And it made much more money than Schvartsman expected. The app is now on-track to bring in $2 million in annual revenue, he said, with 80 percent of that coming from ads.

Now Best, Cool & Fun Games has followed the example of Ant Smasher’s success, releasing its other games in free, ad-supported versions. It cross-promotes its games with house ads. One out of three users who saw the Ant Smasher ad downloaded the free version of the game, Schvartsman said.

Moving forward, Best, Cool & Fun Games plans to start offering virtual goods in its games (good thing the Android Market finally supports in-app purchases) and launch tools that make it easier for developers to create games of their own. The company is in the process of raising venture funding, he said.

As for AdMob, Google’s acquisition of the mobile ad company has hit some bumps recently, including the departure of CEO Omar Hamoui and engineering manager Kevin Scott. But Google says the network is still performing well, with more than 2 billion ad requests per day (up four times from a year ago) and more than 50,000 publishers.

Google has so far announced 19 acquisitions in 2010, well past the seven deals it closed last year and accounting for 28 percent of all of Google’s acquisitions to date, according to Reuters data.

Google has typically leaned toward acquiring smaller companies for either their personnel or technology. Aside from a few high-profile acquisitions — namely AdMob and travel software company ITA Software — Google has had a number of sub-$100 million purchases in the form of companies like GrandCentral (which later became Google Voice). And that strategy is unlikely to change, said Google vice president of corporate development David Lawee, who took over Google’s Mergers and Acquisitions group in 2008, according to Reuters.

Google has plenty of cash to continue its shopping spree. The search giant had around $11 billion in cash at the end of its most recent quarter, according to a 10-Q financial statement filed with the Securities and Exchange Commission. Acquisitions like the $750 million AdMob exit in 2009 might seem like a pretty significant fraction of Google’s cash reserves, but Google has consistently recorded net income of between $1 billion and $2 billion in all but one quarter since 2007, and generated more than $9 billion in cash flow from operating activities last year.

[Photo: dannysullivan]

Specifically, Hamoui said the iAd program presents “a really interesting take” on mobile ads, and that Apple’s rich media approach should help attract large brands to the industry.

“Any advertiser that they bring is going to benefit everybody,” Hamoui said. “It’s not a zero sum game.”

(The other benefit of iAd, which Hamoui didn’t bring up, is that Apple’s entry into the field apparently helped convince the Federal Trade Commission to approve Google’s acquisition of AdMob.)

That doesn’t mean everything’s rosy in AdMob’s relationship with Apple, of course. Hamoui reiterated that if Apple decides to “enforce the letter” on its new developer agreement, it will block AdMob from running ads on the iPhone. Apple hasn’t moved on that yet, but it has added “a degree of general uncertainty” to the market.

Reporter Jon Fortt, who was interviewing Hamoui on-stage, asked whether AdMob is making any contingency plans. Hamoui said those contingencies would revolve around other phones, but he added, “We’re hopeful that we’re going to be able to find a solution.”

Talking more broadly about the mobile advertising industry, Hamoui quoted AdMob’s Jason Spero, who said that where independent networks like AdMob blazed the trail, “now it’s more about paving the roads.” The process still isn’t as smooth as it could be. As an example, he noted that on desktop browsers, “there’s really nothing an ad network can do that a publisher can’t do.” Mobile publishers should get access to more technology, bringing them on-par with ad networks and therefore bringing more standardization to the market.

[photo: Miikka Skaffari]