Network News

X My Profile
View More Activity

FTC prolongs review of Google-AdMob merger, asks for more details

The Federal Trade Commission has asked for more information from Google about its acquisition of mobile phone advertising platform AdMob, according to Google.

The FTC is looking into potential antitrust violations as part of a regulatory review of the merger. Google announced its acquisition of AdMob in November.

Google said in a blog post Wednesday afternoon that the FTC informed the search engine giant that it was conducting a "second request" in its regulatory review of the $750 million merger.

The FTC doesn't comment on mergers under review. But the prolonged review is more evidence that the agency -- charged with ensuring competition in business industries and protecting consumers' interests -- is taking a more proactive approach to enforcement of the high-tech industry. The FTC also appears to be taking a forward-looking approach to the sector, where technology trends can move more quickly than regulations and enforcement, analysts say.

Earlier this month, the FTC filed a lawsuit against chip giant Intel for anti-competitive practices. In its suit, it brought up burgeoning concerns about Intel's business and marketing practices in the graphics chip business - -a nascent portion of the chip industry that is expected to become a bigger part of computing as video and other data-intensive graphics become more common.

Google said in its blog post that it expected a "consequence of Google's success" would be tougher scrutiny of the deal. But it said that it didn't expect the agency to find antitrust concerns, and that it has been in talks with the FTC in recent weeks.

"As we said when we announced the deal, we don't see any regulatory issues with this deal, because the rapidly growing mobile advertising space is highly competitive with more than a dozen mobile ad networks," wrote Google's Paul Feng, a group product manager, in the blog.

"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."

Privacy and consumer interest groups have noted Google's rapid move into the mobile phone industry, where the company seems to be positioning itself to dominate mobile search in the way it has captured the lion's share of Internet search over desktop computers. Nearly seven out of 10 searches are done through Google.

Google's acquisition of AdMob would come along with its plans to launch a mobile phone. The mobile phone, revealed in a blog this month, may be released early next year and would be built on Google's Android operating system. The company's navigation, e-mail, YouTube video application and others are already popular on Apple's iPhone and other mobile phones.

Rebecca Arbogast, head of tech policy research at Stifel Nicolaus, said AdMobs is particularly popular on the iPhone. She said with a rise in location-based mobile computing, click-through rates on those ads are expected to continue to rise, making it an attractive market for Google and competitors like Microsoft and Apple.

"We emphasize that the majority of deals that undergo this additional phase of review are ultimately approved," Arbogast said. "But, as with the Google-DoubleClick deal, and the blocked Google-Yahoo venture, such reviews bring Google's advertising operations under the federal microscope. And, at a minimum, the second request means it will likely take several months before the antitrust review is completed."

By Cecilia Kang  |  December 23, 2009; 3:32 PM ET
 
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: BlackBerry says new software caused Tuesday outage
Next: FCC's Clyburn criticizes Verizon Wireless' justification for doubling fees

No comments have been posted to this entry.

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company