Google Inc’s US$750 million acquisition of mobile ad service AdMob cleared its final hurdle on Friday with a boost from AdMob’s jilted suitor, Apple Inc.
The US Federal Trade Commission (FTC) said it unanimously decided to approve Google’s AdMob deal mainly because of Apple’s recent push into the US$600 million mobile advertising market in the US. The ruling closes a six-month antitrust investigation.
The emergence of another deep-pocketed competitor eased the FTC’s concerns that Google would be able to use AdMob as a springboard for extending its dominance into the nascent field of wireless devices.
“The presence of Apple made it for hard for the commission to construct a merger challenge that it felt it could win,” said Jeff Shinder, a New York antitrust lawyer who is a former special counsel to the FTC.
Apple’s role in persuading the government to sign off the deal is a weird twist because the maker of the iPhone and iPad was negotiating to buy AdMob before Google swooped in with a higher bid in November.
Shortly after the AdMob snub, Apple bought a smaller mobile ad service, Quattro Wireless, that is providing the technology for the iAd platform that persuaded the commission to sign off on Google’s deal.
Now that it has regulators’ blessing, Google said it would take over AdMob within the next few weeks.
AdMob, launched four years ago by Omar Hamoui, runs a network that delivers targeted advertising to Web sites and to online applications tailored for smartphones, including Apple’s iPhone and devices powered by Google’s Android software.
This marks the second time in three years that the FTC has launched an extensive investigation into a Google acquisition aimed at expanding its share of the digital ad market. The commission spent a year examining Google’s US$3.2 billion acquisition of online ad service DoubleClick Inc before approving it in March 2008.
The commission had feared that a combined Google-AdMob would thwart competition and possibly have a ripple effect on the mobile phone applications that rely on ads.
Combined, Google and AdMob will have a 21 percent share of the US mobile ad market, followed by Millennial Media at 12 percent, according to the most recent statistics from International Data Corp.
Yahoo is next at 10 percent followed by Microsoft at 8 percent and Quattro Wireless at 7 percent.
The big question now is whether Google and Apple will be able to leverage their advertising networks and widely used platforms for mobile applications to create an effective duopoly in the market.
Industry analysts and mobile ad executives are skeptical and predict that other major companies will try to muscle into the market with acquisitions of their own. Other mobile ad services still in play include JumpTap, GreyStripe, Mojiva and Mobclix.
Microsoft and even some magazine publishers developing applications for mobile devices may emerge as buyers, eMarketer analyst Noah Elkin said.
“A lot of molds have been broken in terms of who might try to get into this space,” Elkin said. “Everyone wants access to this mobile audience.”
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