Google's Purchase of AdMob Faces FTC Scrutiny
Google Dec. 23 said the Federal Trade Commission issued a "second request" for information related to Google's $750 million bid for mobile display ad startup AdMob. The move, a signal that the FTC has concerns about the planned purchase, will likely delay the acquisition to later in the year. Whether that hitch is temporary or permanent remains to be seen, but the second request process is an arduous one that requires loads of documentation. Should Google and AdMob combine, they will have earned $68 million in mobile ad sales to give them 24 percent of the market. Millenial Media, Yahoo and Microsoft command 18, 11 and 8 percent of the market, respectively.Google Dec. 23 confirmed that the Federal Trade Commission has asked the search engine for more information regarding its $750 million bid for mobile ad provider AdMob. Google said the FTC issued a "second request" for information related to the deal, which was announced Nov. 9 and was slated to close in early 2010. The move, a signal that the agency has concerns about the planned purchase, will likely delay the acquisition to later in the year.
AdMob makes a software platform that helps customize digital display advertisements to small screens on smartphones, whose full Internet browsers make them a rich, new playground for mobile ads.
"We know that closer scrutiny has been one consequence of Google's success, and we've been talking to the U.S. Federal Trade Commission over the past few weeks... While this means we won't be closing right away, we're confident that the FTC will conclude that the rapidly growing mobile advertising space will remain highly competitive after this deal closes. And we'll be working closely and cooperatively with them as they continue their review."Whether that hitch is temporary or permanent remains to be seen, but the second request process is an arduous one that requires loads of documentation. According to this primer from the FTC: "A Second Request combines a burdensome set of interrogatories with a burdensome document request. Responding to the interrogatory specifications of a Second Request may entail tortuous excavation of financial databases that were not originally designed to capture the data sought by the government." To be sure, Google's dominance in search advertising and expansion into several Web services in recent years have made it a larger target for federal regulators. The company bought video-sharing power YouTube and had to fight to acquire online display ad giant DoubleClick for $3.1 billion. Google in the last several months came under scrutiny for its Google Book Search proposal, which the Department of Justice urged the New York District Court presiding over the settlement to reject on grounds that it violated antitrust laws.