Why the FTC Should Approve the Google-AdMob Deal

Image courtesy Flickr user miker (http://www.flickr.com/photos/miker/355277060/)Lawyers at the U.S. Federal Trade Commission will urge the government to put the kibosh on Google’s proposed $750 million acquisition of AdMob, Reuters reported last week.
The FTC’s wariness regarding Google is understandable: Google owns Internet search around the world and last year posted a staggering net income of $6.52 billion. AdMob, too, has effectively leveraged its position as a first-mover in mobile Web advertising to become the dominant player in its space, according to figures released late last year from IDC. The market research firm said Google and AdMob together would claim a 24 percent share among U.S. mobile ad networks based on estimated 2009 revenues.
But, as I discuss in my weekly column over at GigaOM Pro (sub req’d) today, mobile advertising is still in its infancy, and it’s far from clear who will emerge as long-term winners in the space. Apple, which last week took direct aim at Google and AdMob with its iAd platform, is gearing up to become a major player in mobile ads as well. And Apple isn’t the only other major player on the field.
Millennial Media — should the AdMob acquisition go through — would be the largest independent firm in the space, with 18 percent of the market according to IDC’s figures. Other contenders include Yahoo, Microsoft and JumpTap, not to mention AOL and Nokia. It’s also worth noting that countless smaller players, such as ChaCha, WHERE, Goldspot and 4INFO, are gaining traction in segments other than display ads, which are AdMob’s bread and butter. And mobile carriers, who have yet to make much of an impact in the space, may yet leverage the user data and demographic information that remain the most potentially effective tools in mobile advertising.
All of which goes to say that AdMob’s position as a leader could change relatively quickly. So while the FTC is right to look closely at the deal, it would be short-sighted to block the acquisition. After all, Third Screen Media was once a leader in mobile marketing too.
Read the full article here.
Photo courtesy Flickr user Mike Rowehl