Wednesday, December 23, 2009

An update on our AdMob acquisition

Since we announced our plans to acquire AdMob, we've been excited about the positive reaction -- particularly from advertisers and publishers who have told us that they're enthusiastic about the possibilities for how the combination of AdMob and Google can improve the effectiveness of mobile display advertising.

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.

That 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. This week we received what's called a "second request," which means that the FTC is asking for more information so that they can continue to review the deal.

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.


Scott Cleland said...

Scott Cleland of Precursor LLC commenting.

I must respectfully challenge your re-assertion that you "don't see any regulatory issues with this deal," given that the FTC's second request indicates there must be "some" at least.
In my analysis,"Googleopoly V: Why the FTC Should Block Admob," I presented my top 10 reasons the deal should be blocked, which also suggest there are some "regulatory issues." It can be found at:

The short summary of the white paper follows:
"A Google acquisition of AdMob would eliminate Google’s only substantial rival platform in mobile in-application advertising and catapult Google from an estimated 25% share to over 75% share of this strategic gatekeeper market for monetizing mobile Internet applications. Combined with Google’s search advertising monopoly and dominance of mobile search advertising, Google’s acquisition of AdMob, “the world’s largest mobile advertising marketplace,” would likely tip the broader mobile advertising marketplace from a competitive to a monopoly trajectory. In short, the AdMob acquisition threatens to foreclose competition and facilitate monopoly in a strategic gatekeeper market essential to the Internet economy, which would harm: consumers, developers, advertisers, publishers, smart-phone manufacturers, and broadband providers."

Thank you for the opportunity to comment.

Berin M. Szoka said...

Scott, I count 36 references to the word "gatekeeper" on your blog, all but two of which can be distilled to the argument which seems to have become your life's work: Google is the greatest "strategic gatekeeper" the world has ever known.

Both you and I spend a lot of time trying to debunk the arguments made (sometimes by Google) for net neutrality mandates based on the idea that ISPs are the great "gatekeepers of the Internet. But the difference between us is that you simply turn those arguments against Google, claiming that they are the real gatekeeper we should be trying to change through regulation.

My argument, in a nutshell, is that there are no gatekeepers in any meaningful, permanent sense we should be concerned about: whatever "bottleneck" power any alleged "gatekeeper" might seem to possess, just will last for long because of the constant churn of disruptive innovation that unseats even the biggest players (IBM, Microsoft, AOL, AltaVista), and that there are very strong incentives for even the most "powerful" players not to use whatever temporary "control" they might have, lest they alienate customers and tarnish their brands. Moreover, I see the push for "neutrality" mandates taking us down a terribly dangerous road towards common carriage regulation of all major players in the Internet ecosystem, from ISPs to search to social networking. in short, these gatekeeper arguments are the most persistent and, in my view, baseless arguments for bringing the Internet under government's thumb.

And your argument seems to be that consumers can easily switch between broadband providers, who have strong disincentives not to degrade the quality of their service by blocking access to certain content ( which I wholeheartedly agree with), but... what? That nobody can switch away from using Google and Google has every incentive to abuse its current leadership and certain markets?

Doesn't that seem just the slightest bit inconsistent? Don't you worry about giving credence to the "gatekeeper" approach that lies at the very heart of the "net neutrality" regulations we both oppose?

Berin Szoka
Senior Fellow
The Progress & Freedom Foundation

LucianoLWoodell said...


Furrier said...

I would be shocked to see them reject this deal. There is plenty of opportunities in mobile advertising like Millennial Media.

Sure Google took innovation off the table but there is no issue here and the FTC needs to move on.

Enigo26 said...

Perhaps I'm out of my league here, as I have no blog and do not work for a think tank; I simply work at my middle-class job, hang out with my family and sleep occasionally.

As far a Google or any other major corporation expanding their reach further and further into my life, it needs to stop. These companies are like a cancer, growing bigger and spreading throughout our system until eventually, as we saw with the recent economic collapse, we have a major failure. Or, perhaps worse, we get to the point where we are so dependent on them that they practically control every decision we make. Why must they grow and spread and infect everything? What ever happened to "Do one thing and do it well?"

The only recourse we have against these cancers is government action. Obviously, government power can be misused and we should be wary of that, but right now, it pails in comparison to corporate power. Government should answer to its people, yet we hear so much about lobbyist intervention and corporate favors. Who do these gigantic, multinational corporations answer to? Their major shareholders: individuals from all over the globe whose primary goal is to accumulate as much wealth as they can. They have no allegiance to you– just hand over your share.

Now as far as net neutrality, etc., I find it laughable that, with the frenzy of mergers and acquisitions that define "competition" today, the exponential growth in the size and scope of corporations and the recent financial collapse, anyone still believes laissez-faireism works. To think that some invisible free-market deity will never allow complete, sustained domination by a select few is simply naive. With the ever-accelerating advancement of technology, the "the constant churn of disruptive innovation" is getting less and less obtainable by anyone but those already in the game. And those who do manage to break though will only be bought out by the big players anyway.

As long as big business has it's claws sunk so deep into our government, things will not change unless a significant proportion of citizens realize what's happening. I just hope that when it happens, it's not too late.

WhiteLotus said...

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i suggest to take a look on here is publishers money eater monster company.

kazutomoaoto said...

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just wondering if it is a new stuff