After a six-month investigation, the Federal Trade Commission (FTC) on Friday approved—unanimously and without condition—Google's $750 million purchase of mobile advertising firm AdMob. The deal will further extend the reach of Google's dominant online advertising, angering critics who fear the online giant's ever-expanding reach. But Google was helped by a recent announcement from Apple: Because Apple is jumping into mobile advertising with its iAd platform, the FTC cleared the AdMob purchase, citing the need for competition.
"\\[Google and Admob\\] have economies of scale that give them a major advantage over smaller rivals in the business," an FTC statement reads. "These concerns, however, were outweighed by recent evidence that Apple is poised to become a strong competitor in the mobile advertising market." The agency pledged to continue monitoring the mobile advertising market to ensure that the competitive environment there protects US consumers.
Technology pundits seem split on whether Google should be given this shortcut to extending its dominant ad platform to mobile devices. Google earned almost $24 billion in revenues last year, and an estimated 99 percent of that revenue was derived solely from advertising. (Some mistakenly believe that Google is a cloud computing enterprise because of its many web services. Those services are currently all charities, from what I can tell.)
AdMob specializes in tiny ads that can be placed inside of mobile apps running on popular platforms like Android and iPhone. According to reports, Google paid a premium for the company simply so that Apple couldn't purchase it. Apple was forced to purchase Quattro Wireless to jumpstart its iAd efforts instead.
Google has made other strategic purchases in the past to extend its advertising empire. In 2007, the FTC approved Google's $3.1 billion acquisition of DoubleClick, which was perhaps even more controversial. But with growing influence comes even closer scrutiny. Though Google has thus far escaped official charges of antitrust abuse, various governments around the world are paying attention. It's only a matter of time.
