FTC request will delay deal closing
Google makes huge amounts of money from
its internet advertising programs and is always looking to expand its
advertising reach by acquisitions and new advertising avenues. One of
the most recent advertising avenues that Google is looking to pursue
is mobile ads.
Google announced in early November 2009 that it
was looking to purchase
mobile advertising firm AdMob for $750 million. While all parties
in the mobile advertising market agree that the segment is very
young, it is shaping up to be the next big deal in advertising. When
Google moved to purchase online ad firm DoubleClick in 2007, the deal
came under scrutiny by the FTC, who ultimately approved
the purchase in December of 2007. By June of 2008, Google was
predicted to make about $1 billion on display ads.
Google's
purchase of AdMob has come under close
FTC scrutiny, much like the DoubleClick deal of 2007. The
purchase of AdMob will give Google 24% of the mobile advertising
market. Other big players in the mobile advertising market include
Millennial Media with 18% of the market, Yahoo with 11%, and
Microsoft with 8% of the market. The AdMob purchase will not put
Google in control of an overwhelming amount of the mobile advertising
market.
On December 23, Google confirmed to eWeek that
the FTC had asked for more information regarding its proposed
purchase of AdMob. Google has now confirmed that the FTC has made a
second request for information on the purchase. The second request
will delay the acquisition to later in 2010; the deal was expected to
close in early 2010.
The FTC second request is a very involved
undertaking and the FTC primer for a second request reads ominously,
"A Second Request combines a burdensome set of interrogatories
with a burdensome document request. Responding to the interrogatory
specifications of a Second Request may entail tortuous excavation of
financial databases that were not originally designed to capture the
data sought by the government."
Google's Paul Feng said,
"We know that closer scrutiny has been one consequence of
Google's success, and we've been talking to the U.S. Federal Trade
Commission over the past few weeks... While this means we won't be
closing right away, we're confident that the FTC will conclude that
the rapidly growing mobile advertising space will remain highly
competitive after this deal closes. And we'll be working closely and
cooperatively with them as they continue their review."
"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007
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