We’ve been talking with the Federal Trade Commission for the past six months about our planned acquisition of mobile advertising start-up AdMob, which we believe will bring new innovation and competition to mobile advertising. We’ve told the FTC about how new and highly competitive the mobile advertising space is, and the FTC has been talking to others in the industry about their views as well.

Some of those folks are sharing what they told the FTC. The developers of a mobile app called Wertago said they told the FTC that:
The internet and mobile technology sectors right now are perhaps the most (or among the most) competitive and fast-moving industries EVER TO EXIST. The web and mobile spaces have remarkably low barriers to entry. [...] And we think Google’s AdMob acquisition will have little if any effect on the competitiveness of the mobile advertising market space.
Wertago also talked about both the low entry barriers and non-existing switching costs in mobile advertising:
The crucial point here is 1) the marginal advertiser and the marginal developer, not the average or typical advertiser and developer, are who drive the competition, and there will always be a fight for them, especially because of the “long-tail” where lots of niche opportunities exist, and 2) the cost of switching ad networks in a mobile app is close to zero, and the cost of developing an ad network is not terribly high and easily bankrolled.
Industry analyst Greg Sterling also met with the FTC, and said that he told them:
I didn’t believe competition would be affected adversely and that advertising prices were not likely to go up. Indeed, mobile CPM prices have been falling in mobile. In short I said, yes Google becomes more powerful and effective but the deal doesn’t stifle competition. The market is dynamic and highly competitive, I told the FTC.
I’m no laissez-faire capitalist but I think the mobile ad market is both very young and highly dynamic. It’s evolving quickly and definitely very competitive. If the objective of anti-trust law is to protect competition in the market then it is simply unnecessary for the FTC to intervene at this stage by blocking the AdMob deal.
Other analysts and observers have been weighing in too:
With Google and AdMob facing strong competition every day from businesses like Apple, JumpTap, Millennial Media, Microsoft, inMobi, Greystripe, Mobclix and many more, we agree that there’s vibrant competition in this space.

Update (5/5): Dow Jones asked a few players in the mobile industry yesterday what they thought about the deal:
Two of these people said the FTC staff didn't appear to be taking into account other companies like Millennial Media Inc., Greystripe Inc. and Jumptap Inc., all of which operate in-application advertising networks. By a broader definition, the mobile advertising market also includes corporate behemoths such as Yahoo Inc. (YHOO) and Microsoft Corp. (MSFT), which serve ads displayed on mobile websites.[...]

Industry insiders and analysts said an FTC antitrust challenge would be problematic for a number of reasons. One industry source argued that it was a "flawed theory" to distinguish between ads that appear within mobile-phone applications and those displayed on mobile websites. This person said the mobile-advertising market is at such an early stage that it is impossible to predict which companies will emerge on top.

Michael Chang, chief executive at Greystripe, acknowledged that the combination of Google and AdMob would create a stronger rival, but he agreed that the market is too new and too dynamic to predict how it will evolve.

"It definitely creates a stronger competitor, but we're in the second inning and it's going to be a long game," said Chang.