The Federal Trade Commission has closed its investigation of Google's proposed acquisition of AdMob, clearing the way for the deal's approval and signaling the potential for major implications for mobile and online marketers.
With AdMob, the search giant gains a leading advertising network for mobile devices. Google (NASDAQ: GOOG) paid $750 million for the firm, however, the purchase ran into early snags: Some consumer groups had opposed Google's acquisition of AdMob on the grounds that it could drive up prices for advertisers and also, they charged, posed a risk to consumer privacy.
Despite acknowledging the deal had raised "serious antitrust issues," the FTC said the rise of Apple's rival mobile advertising efforts convinced the agency that there was enough competition in the mobile ad space, and approved the AdMob deal as a result.
In January, Apple (NASDAQ: AAPL) acquired Quattro Wireless, considered the No. 2 player behind AdMob and a key part of Apple's new iAd ad network for the iPhone.
Ironically, Apple had originally tried to buy AdMob itself, but wound up being outbid by Google.
"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 a statement. Impact on Mobile Marketers
The FTC also noted that a number of firms appear to be developing or acquiring smartphone platforms to better compete against Apple's iPhone and Google's Android, and these firms would have a strong incentive to facilitate competition among mobile advertising networks.
To industry watchers, the completion of the AdMob buy could further advance the burgeoning mobile marketing space. Richard Brandt, author of a book on Google's co-founders, said that on paper the deal could be good for e-marketers and shoppers because of Google's reach.
"Google has always argued that its ads are set by auction so there is no way it can fix prices or be anticompetitive," Brandt told InternetNews.com. "But the counter to that is that if there are more auction-based advertising systems out there, you would probably be able to choose cheaper advertising services. Then again, being smaller than Google, those ad networks might not be as effective."
In a blog post, Google's vice president of product management, Susan Wojcicki, said the decision is "great news for the mobile advertising ecosystem as a whole."
She also said the rapid growth in mobile advertising is going to spur companies like Google and others to provide better advertising solutions and help e-marketers find new ways to reach consumers. As a result, users will get better ads and more free content.
"We’re very excited about the possibilities in this field," Wojcicki said. "As an immediate matter, we’re now moving to close this acquisition in coming weeks. We'll then start work right away on bringing AdMob's and Google's teams and products together."
Brandt agreed that the government's sign-off on the AdMob buy could be a boon for Google's efforts to further extend its marketing services.
"I'm very surprised the FTC approved the deal, but it's very good news for Google because it saves them from having to invest a lot of money and time to create a mobile ad network from scratch," he said.
David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals.
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