FTC Blesses Google's Bid for AdMob Thanks to Apple's iAd

The Federal Trade Commission agreed to close its investigation of Google's agreement to purchase mobile advertising provider AdMob for $750 million, citing Apple's impending iAd platform and claiming that a Google-AdMob marriage would not harm competition among mobile ad networks. The FTC noted that while Google and AdMob "have economies of scale that give them a major advantage over smaller rivals in the business," Apple is "poised to become a strong competitor in the mobile advertising market."

The Federal Trade Commission unanimously agreed to close its investigation of Google's agreement to purchase mobile advertising provider AdMob for $750 million, paving the way for Google and Apple to compete more fiercely in the mobile Web market.

The FTC, which in recent weeks had been considering filing a lawsuit to block the deal, May 21 cited Apple's impending iAd platform in coming to its conclusion that a Google-AdMob marriage would not harm competition among mobile ad networks.

Mobile ad network sell ad space for mobile publishers, who create applications and content for Websites geared for smartphones such as Apple's iPhone and those running Google's Android operating system.

The agency said its initial concerns that the merger would be anticompetitive were unfounded thanks to activity from smaller companies in the market and iAd, a mobile ad network it fashioned after acquiring Quattro Wireless.

Slated to become available in June with the launch of iPhone 4.0, iAd is an application platform that runs ads within applications instead of pulling people into a new browser window. It is a departure from the search-based keyword ads Google is known for rolling out on the desktop and mobile Web.

"As a result of Apple's entry [into the market], AdMob's success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob's competitive significance going forward, whether AdMob is owned by Google or not," the FTC said in its statement.

The FTC noted that while Google and AdMob "have economies of scale that give them a major advantage over smaller rivals in the business," Apple is "poised to become a strong competitor in the mobile advertising market."

Google, whose CEO Eric Schmidt told Reuters the company would fight to buy AdMob to fend off Apple, was pleased with the FTC's decision and vowed to close the deal in weeks.