Experts Say Google's AdMob Bid Shouldn't Spark Antitrust Concerns

Experts say the mobile ad market is too immature, small and fragmented for antitrust regulators to try to quell Google's bid to buy mobile ad exchange AdMob.

When Google bid to buy AdMob for $750 million in stock Nov. 9, the search engine made sure to position the buy as a complement to its existing mobile search ad offerings, and compared it to purchases that rivals AOL, Yahoo and Microsoft have made.

Google, whose moves regarding search are always closely watched because it has 65 percent of the worldwide search market, went so far as to launch this special AdMob Website, looking to convince the Department of Justice, the Federal Trade Commission and any other parties that have turned a piercing eye to the search engine that the deal is good for the mobile ad space.

Google referred to AOL's purchase of Third Screen Media, Microsoft's acquisition of ScreenTonic and Yahoo's buy of Actionality, clearly trying to point to the fact that the market is quite lively on the competition front.

Maybe so, but AdMob is a large mobile ad provider. IDC analyst Karsten Weide told Bloomberg and eWEEK that AdMob could give Google 30 to 40 percent of the mobile ad market overnight if the deal passes muster. Given that position, it's tempting to think antitrust groups would be concerned with this buy.

But Weide and other authorities in the mobile ad space said no. Weide broke it down thusly: The top five players in the mobile ad market are Google, Yahoo, AdMob, Millennial Media and Quattro Wireless, and all of them have 15 to 20 percent market share. Add any two together and you arrive at the 30 to 40 percent figure Weide quoted.

That's not enough to merit antitrust concerns, Weide said. "I don't think there's an antitrust concern because in the search market Google has 60 percent market share and no one cares there either," he explained. "So, I don't really see that it's going to trigger any antitrust activity. I think it's just going to pass as it is."

Google's search share bothers Microsoft and Yahoo, but Weide has a point. The government may have rejected Google's overture to partner with Yahoo, but they have largely left the search engine giant alone.

Kelsey Group analyst Michael Boland agreed, arguing that the Google-AdMob deal may have woken the mobile ad market from its recession-induced slumber:

"Advertisers were scared away by mobile. Two years ago, the mobile Web was growing, there were more users, more devices such as the iPhone and then the economy tanked. Mobile advertising was attractive, but advertisers backburnered it. As we emerge from recession, and mobile Web grows, mobile marketing will ramp. By buying AdMob, Google makes it easier for advertisers."