FTC Says Yes to the Google-AdMob Merger


The Federal Trade Commission gave its blessing Friday to the Google (GOOG) and AdMob merger proposal, dealing a blow to Apple (AAPL) and other companies that are hoping to gain share in the mobile advertising market.

In a 5-0 vote, the commission said Apple's acquisition of AdMob competitor Quattro Wireless and its recent unveiling of the iAd service swayed the FTC toward allowing the Google-AdMob deal to go through. Apple evidently shot itself in the foot by debuting iAd, a mobile advertising network, prior to an FTC decision on the Google-AdMob deal.

"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 commission's statement says.

Competition Could Be Fierce

In addition to Apple, the commission also noted that a number of other companies are lining up to develop or acquire smartphone technologies that will compete against Apple's iPhone and Google's Android and, as a result, provide a strong incentive for these other companies to generate competition among the mobile ad networks.

Nonetheless, the FTC will continue to keep an eye on mobile advertising, and it wasn't totally without reservations regarding the Google-AdMob deal. Those concerns included the direct competition that Google and AdMob were engaged in prior to the merger announcement and how the combined company would wield a major advantage over smaller rivals because of the economies of scale achieved post-merger.

Sources say this issue applies only to the U.S. Google and AdMob have little concern that the increasingly active antitrust officials at the European Commission will take up this merger, given that the impact in Europe is minimal at best.

Now that the antitrust review is behind it, Google says it will work quickly in the coming weeks to close the deal, according to a posting on its company blog. In a statement, it said: "As mobile phone usage increases, growth in mobile advertising is only going to accelerate. This benefits mobile developers and publishers who will get better advertising solutions, marketers who will find new ways to reach consumers, and users who will get better ads and more free content."

Apple declined to comment for this article.