Inside Google

Internet giant Google appears to be concerned that its proposed $750 million acquisition of mobile advertising company AdMob is running into serious antitrust objection.

The deal was announced last fall and instead of receiving a cursory look by the Federal Trade Commission, the FTC made a "second request" for details. Consumer Watchdog and the Center for Digital Democracy wrote the FTC opposing the deal over antitrust and privacy concerns.

Last week Bloomberg reported that the FTC was seeking sworn statements from companies, a sign that the staff considers that litigation is definitely possible.

Google, apparently concerned, is pushing back. According to TechCrunch, it’s asking some companies to write letters supporting the deal. The technology news Website’s Michael Arrington reported:

The company was asked to write their thoughts on “Do you think mobile advertising is going to keep growing, and that Google’s acquisition of Admob won’t hurt your business or decrease competition in the mobile market?”

Key to understanding the deal’s antitrust problems is realizing what market matters.   Some have estimated that a combined Google/AdMob would have only about 25 percent of the mobile advertising market.  Those estimates are based on the current market, where a substantial amount of advertising is text messages.

With the boom in smartphones that form of advertising is increasingly irrelevant.  What matters are in-application ads.  Knowledgeable analysts say a Google-AdMob combination would control 70 percent or more of that vital segment.

This deal needs to be blocked.