FTC Seeks Input from Google Rivals About Its AdMob Bid

The Federal Trade Commission is looking for official declarations from Google rivals and advertisers about Google's proposed purchase of mobile ad provider AdMob, which could signal the regulator may challenge the deal.

Google offered to buy AdMob, which sells ads for placement on Web pages and applications running on Apple's iPhone, Google Android phones and other devices, last November for $750 million.

AdMob's technology would help make Google the leader in mobile advertising, with about 24 percent of the market, and give Google greater control over the ad distribution on Android devices such as the Nexus One.

While many believe the mobile ad market is competitive enough to withstand this acquisition -- partly thanks to Apple's subsequent bid for Quattro Wireless -- the FTC in December issued a "second request" for information from Google related to the deal.

Bloomberg News said March 10 that the FTC is now asking Google competitors and advertisers for input about the deal to help its investigation into whether the purchase would reduce competition in the mobile ad market.

This sector includes Microsoft, Yahoo and a host of smaller startups such as Millenial Media, Jumptap, Greystripe and many others.

The FTC, which declined to comment on its investigation of the deal for eWEEK, is asking at least two companies to sign statements, according to anonymous sources who talked to Bloomberg.

Asked for comment about this issue, a Google spokesperson said it was continuing to work with the FTC, ideally to bring its deal to fruition.

"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," the spokesperson said. "We're confident that they'll conclude that the rapidly growing mobile advertising space will remain highly competitive after this deal closes."

Not every watcher with a stake in the mobile ad market sees Google's bid for AdMob as harmless.

Simon Buckingham, CEO of mobile content retailer MobileStreams, estimated that Google and AdMob combined would quickly control more than three-quarters of the U.S. market for advertising within applications.

"If the deal proceeds, it will put Google in a very strong position for many years to come since they would control major parts of both the desktop and mobile advertising spaces as these two industries converge," Buckingham wrote in his blog Jan. 30.

Indeed, the FTC's close scrutiny of the AdMob deal is not simply owed to the mobile ad market. Companies such as Microsoft, Yahoo, as well as the FTC, Department of Justice and the European Commission are concerned about Google's dominance in desktop search.

The DOJ, for example, has opposed Google's recent Google Book Search deal on the grounds that it would give Google too much control.

In cautiously examining the AdMob bid and talking to industry rivals, the FTC wants to make sure that Google doesn't extend its desktop search purview to the mobile Web.