The Federal Trade Commission reportedly wants to file an antitrust suit to block Google's $750 million bid for mobile ad provider AdMob, Bloomberg said. The FTC has been reticent to comment publicly beyond saying it is investigating the AdMob bid, but the agency suggested a suit was being considered in March when it sought official declarations from Google rivals and advertisers about Google's offer. If Google can't acquire AdMob and rationalize its assets for its own in-app advertising, Apple could race to an early lead in the nascent market.
The noose may be circling tighter around Google's bid to
buy AdMob, as the Federal Trade Commission reportedly wants to file an
antitrust suit to block the $750 million deal.
Google agreed to
AdMob last November, a move that would give Google the inside track on
in-app advertising, or applications that run inside mobile apps.
This approach is a departure from the traditional ads
paired with keyword searches, which Google claims is a solid business. Google
and AdMob together would boast roughly 25 percent of the mobile ad market, and more
where in-app ads are concerned, analysts and experts claim.
The spectre of an antitrust suit, which Bloomberg
the FTC's staff is pushing for, is reminiscent of the FTC's opposition to
Google's agreement to float search for Yahoo in June 2008, which the search
engine set up to keep Yahoo from landing in Microsoft's lap.
The FTC has been reticent to comment publicly
beyond saying it is investigating the AdMob bid, but the agency suggested a suit
was being considered in March when it sought
official declarations from Google rivals and advertisers about Google's offer.
Meanwhile, Google continues to put a happy face on the
negotiation with the FTC, as a spokesperson told eWEEK: "We're continuing
to talk with the FTC about our acquisition of AdMob. We're confident that
they'll conclude that the rapidly growing mobile advertising space will remain
highly competitive after this deal closes."
Ironically, Apple officially validated the in-app ad approach. After Google
Apple for AdMob last year, Apple
in-app ad provider Quattro Wireless for a reported $275 million.
Apple earlier this month showed the fruits of that
purchase in the form of
, a new ad platform that launches ads from applications, but lets users
return to their apps when the ad is finished with no hassle. The company plans
to roll that platform out for iPhone 4.0 and iPad later this summer, allegedly charging
into the millions for campaigns created on iAd.
If Google can't acquire AdMob and rationalize its assets
for its own in-app advertising, Apple could race to an early lead in the nascent market. This is a
possibility Google is painfully aware of, said a person familiar with the
It could also serve as the crux of the defense against
any antitrust suit versus Google in this matter. Meanwhile, concern about
Google's AdMob bid has trickled down to Senate subcommittees.
Sen. Herb Kohl, chairman for the subcommittee on
antitrust, competition policy and consumer rights, argued
last month that the deal raises concerns about competition that need to be
scrutinized by the Federal Trade Commission.
U.S. lawmakers led by Rep. John Barrow, D-Ga., filed a
April 30 asking House Energy and Commerce Committee Chairman Henry
Waxman for a briefing on the FTC's review of Google's AdMob bid.
Barrow and his constituents said the deal must be
reviewed carefully given Google's dominant position in search advertising and
its growing dominance over other forms of online advertising, such as mobile.
"Given the huge economic potential of the mobile
Internet and the important role that mobile advertising will play in its
growth, we believe these issues merit serious attention," Barrow said.