US trade commision to oppose Google's AdMob purchase

The US Federal Trade Commission (FTC) staff is urging the filing of an antitrust suit challenging Google Inc’s $750 million acquisition of AdMob Inc, according to three people familiar with the matter.

It will be up to the five-member commission to decide whether to follow the staff’s advice or approve the deal. The people familiar with the matter spoke on condition of anonymity. Peter Kaplan, an FTC spokesman, declined to comment.

The FTC staff signalled last month it was leaning toward urging a court challenge when it was disclosed that the agency was seeking sworn declarations from Google’s competitors and advertisers.

“We’re continuing to talk with the FTC about our acquisition of AdMob,” said Google spokesman Adam Kovacevich. “We’re confident they’ll conclude that the rapidly growing mobile advertising space will remain highly competitive after this deal closes.”

The concern is that Mountain View, California-based Google, owner of the world’s most popular web search engine, would reduce competition in the market for advertising on mobile phones. AdMob, based in San Mateo, California, sells ads that appear on web pages and applications on mobile phones.

Advertisers have expressed concern the deal would lead to higher rates. “We want it to be competitive,” said Simon Buckingham, chief executive officer of Appitalism Inc, a New York-based software developer. “I’m not going to have any choices” if the purchase goes through.

Mobile Advertising
Google’s purchase of AdMob would form the largest mobile- advertising company. The companies combined had 21 per cent of US market in 2009, according to Karsten Weide, an analyst with researcher IDC in San Mateo. The market has been doubling or more in size annually, Weide said.

A bipartisan group of House lawmakers today asked for an FTC briefing on the investigation.

“The need for a thorough review is particularly pressing given Google’s dominant position in search advertising” and “its growing influence over other forms of online advertising,” the lawmakers wrote in a letter to House Energy and Commerce Committee Chairman Henry Waxman, a California Democrat. Three Democrats and two Republicans signed the letter.

On April 12, Google Chief Executive Officer Eric Schmidt said Apple Inc’s move into mobile advertising shows the market is competitive and that federal regulators should permit the AdMob purchase. Apple is planning to offer iAd, an advertising platform to compete with AdMob.