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You are here: Home / Sales & Marketing / FTC Probes Google's AdMob Plans
FTC Probing Google's Planned AdMob Acquisition
FTC Probing Google's Planned AdMob Acquisition
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
U.S. regulators are reportedly digging deeper into Google's planned AdMob acquisition. The Federal Trade Commission is asking for sworn statements from the search giant's competitors and advertisers in what could signal plans to hold up the merger. The news comes as part of a wave of government scrutiny against the maturing company.

According to Bloomberg News, the FTC is seeking to learn whether Google's proposed purchase of the mobile-ad technology provider would lessen competition in the market for Internet advertising on mobile phones. The FTC couldn't immediately be reached for comment.

Bloomberg didn't identify the names of two companies that said they were asked to sign statements for the probe. However, it's likely that the FTC spoke with companies like Microsoft, Yahoo, Jumptap and Millenial Media, all of which have stakes in this growing space.

Will Google Dominate Mobile?

"We're continuing to talk with the FTC and provide the information that they've asked for, but we're not going to discuss the details of that process," a Google spokesperson said. "We're confident that they'll conclude that the rapidly growing mobile-advertising space will remain highly competitive after this deal closes."

Google announced plans to acquire AdMob for $750 million in stock in November. Although the FTC is concerned that the acquisition would reduce competition, Google painted a win-win picture, predicting the acquisition would enhance the company's expertise and technology in mobile advertising and give advertisers and publishers more choice in the emerging mobile market.

Google is jockeying for position in a mobile market that is projected to be worth billions in just a few years. Jupiter Research issued a recent report, Mobile Advertising: Delivery Channels, Business Models & Forecasts, that predicts the mobile-advertising market will grow to $5.7 billion by 2014.

According to IDC, if the Google-AdMob merger is approved, it would create the mobile-advertising industry's largest company. Google and AdMob collectively boasted 21 percent of the U.S. mobile advertising market in 2009. That figure could be as high as 30 percent to 40 percent in 2010.

Google Learning Lessons

"One would expect this type of acquisition is something the government would be looking into, given Google's overall position in online advertising," said Michael Gartenberg, a partner at the Altimeter Group. "When you are the size and scale of Google and you've cornered successfully so much of a given market, it tends to attract government attention, particularly when you start engaging in new areas. These are lessons that both Microsoft and IBM have learned over the past 20 years."

From Google's perspective, the AdMob deal will help the company develop more effective tools for creating, serving and analyzing emerging mobile-ad formats. As this ecosystem continues to grow, Google expects the new marketing media to offer significant benefits.

First, Google said, advertisers will be better able to engage mobile users with AdMob's ad formats. Second, publishers and developers will be able to monetize their content more effectively. And third, users will see more relevant ads and ultimately get access to more ad-supported content and applications -- improving their mobile experience.

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