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CUSTOMER RELATIONSHIP MANAGEMENT NEWS. UPDATED 13 MINUTES AGO.
You are here: Home / E-Commerce / Groups Oppose Google-AdMob Deal
Consumer Groups Oppose Google's AdMob Acquisition
Consumer Groups Oppose Google's AdMob Acquisition
By Patricia Resende / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
DECEMBER
28
2009
After 59 acquisitions, Google has hit a roadblock with one of its latest purchase attempts. Consumer groups have asked the Federal Trade Commission to block the search giant's $750 million acquisition of AdMob, a mobile advertising company.

The Center for Digital Democracy and Consumer Watchdog said Google's acquisition would be anticompetitive. Acquiring AdMob gives Google the tools it needs to more effectively create and analyze mobile-ad formats.

The groups want the FTC to not only investigate, but block the deal. They want the FTC to consider whether Google's access to AdMob's technology will give it an unfair advantage in selling mobile advertising.

"The mobile sector is the next frontier of the digital revolution," said John Simpson, consumer advocate with Consumer Watchdog, and Jeffrey Chester, executive director of the CDD, in a joint letter to the FTC. "Without vigorous competition and strong privacy guarantees, this vital and growing segment of the online economy will be stifled."

Making Its Case

Google was quick to respond to the complaint.

"We're confident that the FTC will conclude that the rapidly growing mobile-advertising space will remain highly competitive after this deal closes," said Adam Kovacevich, Google's senior manager of global communications. "There are more than a dozen mobile-ad networks, and this deal is similar to mobile-advertising acquisitions that AOL, Microsoft and Yahoo have made in the past two years."

The consumer groups' letter charged, "Consumers will face higher prices, less innovation, and fewer choices." But Google said its acquisition of AdMob will do the opposite.

"The deal will provide users with more free mobile applications, in some cases as an alternative to pay-to-download apps, since it will allow developers to subsidize their products through effective mobile advertising," Kovacevich said.

Consumer privacy is also a concern for the consumer groups. Google responded that it has a track record of providing strong privacy-protection tools such as Google Dashboard, which allows users to opt out of data collection, and it plans to do the same for AdMob.

"While we agree that privacy is important, the FTC stated clearly in 2007 that the law does not allow privacy issues to factor into competition reviews," Kovacevich said.

Industry Support

Google may be one of the most prepared companies to go through this process with the FTC. It has already overcome two other major acquisition hurdles.

The first challenge from regulators came with its 2006 acquisition of YouTube. Google paid $1.7 billion for the company.

Google was again investigated when it announced plans to acquire online marketing company DoubleClick. The $3.1 billion acquisition is Google's largest to date.

Analysts and other industry observers have supported Google's acquisition of AdMob. Some said the deal will enable advertisers to bring more relevant ads to consumers. And others add that the mobile-advertising market is still too small for Google to have a monopolistic stronghold.

While this will be the FTC's second request for information from Google, the company said it's confident the FTC will conclude that the mobile-advertising space will remain competitive.

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