Google Using Apple iAds To Lobby For AdMob Approval

Reports have been surfacing for the past week that the US Federal Trade Commission may be preparing to try and block the $750 million Google acquisition of AdMob. Yesterday at the Apple iPhone OS 4 event Steve Jobs discussed Google several times and acknowledged that Apple tried to buy AdMob but Google “snatched” it away. The competition between the two companies is no doubt what caused the price to skyrocket to $750 million.

Apple of course went on to buy AdMob competitor Quattro Wireless for $250 million.

The Quattro acquisition became the basis for the Apple iAds announcement yesterday. Google has been using the impending iAds announcement for the past week as a way to argue that the market is highly competitive and its acquisition of AdMob should not be blocked. Indeed, the Google-AdMob acquisition won’t likely affect pricing of mobile advertising or result in less competition in my opinion. But the acquisition would likely position Google ahead of rivals like Yahoo and Microsoft in the mobile ad market because the “holistic” proposition that Google would offer would be stronger  (search + display across platforms).

The FTC appears to have a general concern about Google’s size and strength and worries about the company potentially becoming dominant in a new advertising arena. And the scrutiny is justified given Google’s reach and influence on the market. Accordingly the feds may want to “make a stand” with AdMob. However that would be a tough stand to make because it will be very hard to show that prices would likely be affected or that competition would be diminished. In my understanding there is no statute or anti-trust rule against general “bigness.”

There was a chorus of commentary yesterday after iAds was formally announced (nicely compiled and excerpted by Google PR folks) that essentially argues in favor of allowing the acquisition to go through. As a representative example, Wired argues that if the FTC were to block the AdMob acquisition it would be effectively limiting competition, not promoting it.

I wouldn’t necessarily go that far but do agree that FTC action probably isn’t “necessary” to protect competition in this case.