Google recently revealed that the Federal Trade Commission was intensely reviewing the search giant’s recent $750 million acquisition of mobile ad network AdMob. Last week, Google said the FTC has made a second request for further information about the deal. Today, two consumer groups, Consumer Watchdog and the Center For Digital Democracy, have asked (see copy of complaint letter) the FTC to block the deal on anti-trust grounds and possible privacy issues.
In a joint letter to the FTC (embedded below), the two groups say that Google’s acquisition of AdMob would lessen competition in the mobile advertising market, having a potentially negative impact on consumers, advertisers and application developers and others. AdMob is the leader in the mobile advertising space, which is chock full of competitors, including Greystripe and others. We’ve all been speculating on what the impact of a Google-backed AdMob would have on the rest of its competitors, and the mobile advertising market in general.
The letter also raises concerns about consumer privacy. The groups claim that both AdMob and Google have access to large amounts of data relating to consumer behavior, including their location. It’s important to note that consumer groups typically make these sorts of complaints during antitrust reviews because it’s when these groups have the most leverage and the ears of regulators.
Google has high ambitions for AdMob, which was one of Google’s largest acquisitions since it bought DoubleClick for $3.1 billion in 2008. The rise of mobile advertising attracted Google to this space and with the acquisition of AdMob, the search giant could indeed dominate a growing space. AdMob, which some say is approaching a $100 million business within the next three years, could be an extremely profitable channel, especially when the platform is plugged into AdWords and DoubleClick.
COMMENTARY: I covered the Google acquisition of AdMob in my blog when it was first announced in November and commented that Google would encounter resistance to such an acquisition because of the size of the acquisition and competitive advantages it would gain from accessing consumer data both from its search engine and mobile phone users. The AdMob acquisition fits in well with their acquisition of DoubleClick, but I just don't believe that the FTC is going to allow the AdMob acquisition go through given that Google already holds a huge competitive advantages in ad server sector via DoubleClick, and combining this with AdMob just gives them more of a monopoly in the desktop and mobile consumer data space.
Google has over 100 attorney's on staff, and the last time I looked, Google had over 300 lawsuits for restraint of trade, patent infringement and other complaints, so adding one more doesn't phase them. I am very positive that the FTC is going to come to their senses and not let this acquisition stand.
Courtesy of an article dated December 28, 2009 appearing in TechCrunch
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