UPDATE 2-Google buys mobile ad firm for $750 million

* Google to pay $750 mln for AdMob

* Says deal will help create mobile display ads (Adds Google and analyst comments, recasts lead)

SAN FRANCISCO Nov 9 (Reuters) - Google Inc GOOG.O said on Monday that it was acquiring of AdMob, one of the largest mobile advertising networks, for $750 million, widening its bet that cell phone advertising could become the Internet's next-big money maker.

Google's agreement to buy AdMob in an all-stock deal would give it a key asset as it seeks to extend the reach of its online advertising business from the tethered world of PCs to the smartphones that consumers increasingly use to access the Web while on-the-go.

Google's free Android operating system already provides the basic software that powers many of the newer phones, including the recently released Motorola Inc MOT.N Droid, and which compete with Apple's popular iPhone.

Privately-held AdMob makes technology for serving graphical, display ads on mobile phones and maintains a network that allows advertisers to place display ads on mobile Web sites and directly within specialized smartphone applications.

The current revenue opportunity is still modest by Google's standards - J.P. Morgan analyst Imran Khan pegged AdMob's annual revenue at $45 million to $60 million - but analysts said the deal underscores Google's belief that the market is set to grow.

"They've made it pretty clear that mobile is one of the biggest opportunities they see," said UBS analyst Brian Pitz.

The deal appears to represent the third largest acquisition in Google's history, behind the 2008 acquisition of DoubleClick for $3.1 billion and the Google's 2006 acquisition of YouTube for $1.65 billion.