Google Outdueled Apple in Bid for AdMob, Times Says

By Clint Boulton  |  Posted 2010-03-14 Print this article Print

Google Vs. Apple.png

In case the headline and picture above aren't sufficient hints about this post, let's be clear: Google and Apple hate each other with a passion not seen since Apple and Microsoft's mutual loathing from the '80s and '90s.

The New York Times in this fine weekend story chronicles the evolution of Google and Apple's relationship from fast friends to spiteful enemies.

If you believe the Times' take, Google and Apple aren't even really frenemies anymore and Apple is poised to boot Google search and other products from any default position on its iPhone.

All because Google started making phones based on its Android operating system such as the Nexus One, which now includes multitouch capabilities such as pinch-to-zoom.

Apple has patented such capabilities and is suing HTC, which manufactures the Nexus One and many other Android phones, to enjoin them from using multitouch on Android.

The Times covers this and more. If you've been following this brewing nuclear war, you won't learn much new.

But the Times' sleuthing about Google's bid for AdMob unearthed great new details about how Apple offered $600 million for the mobile ad provider last fall. Google, of course, trumped Apple with a $750 million bid. Here is how it went down, according to the Times:

Last fall, Apple made a formal bid to acquire AdMob, a rapidly growing mobile advertising company, for $600 million. AdMob specializes in developing ads that run inside mobile phone applications, like those on the iPhone.

While Apple conducted due diligence on the deal, AdMob agreed to a 45-day "no shop" provision, a routine clause that prevented the start-up from offering itself for sale to others, according to three people briefed on the negotiations. But after Apple inexplicably let 45 days pass without consummating its offer, Google pounced.

Their interest piqued by Apple's pursuit of the start-up, Mr. Schmidt, along with Mr. Page, Mr. Brin and other Google executives, began intensely courting Omar Hamoui, AdMob's young chief executive. AdMob, the Google guys argued, belonged in their corporate family because Google -- unlike Apple -- was an old pro in advertising. They also promised that AdMob employees would be able to cash out stock options sooner than Apple's deal would have allowed. It also didn't hurt that Google was willing to pay a 25 percent premium over Apple's offer.

Three days after the no-shop provision expired, Google agreed to buy AdMob -- putting a whopping $750 million price tag on a four-year-old company with modest revenue. Jilted and angry, Mr. Jobs speculated that AdMob might have violated its legal obligations, with help from Google, according to two people briefed on the fallout from the negotiations.

I find this kind of brinksmanship fascinating. Ironically, while Google may have won that round, it really didn't win anything ... yet. The Federal Trade Commission appears poised to block Google's bid for AdMob and Apple made its play for AdMob rival Quattro Wireless.

The other interesting thing to me were the comments from Lotus Notes creator Mitch Kapor. The Times noted:

Mitch Kapor, the founder of Lotus Development and now a tech investor, describes such infighting as "old wine in a new bottle," and reminiscent of many past corporate battles in Silicon Valley. He sees the old dynamics between Apple and Microsoft being recycled, with Apple still trying to control every aspect of the user experience, and Google, like Microsoft before it, working with multiple partners to flood the market with a large number of devices.

This sums up the current situation, and if it holds true, Android is poised to be the next Windows Mobile, which has to be disconcerting for Google. In any case, a great read. Here are some of my pieces detailing other ins and outs of the Google vs. Apple battle:

More discussion on this topic on TechMeme here. |

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel