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FTC likely to block Google-AdMob deal, developer says it’s “unsophisticated”

May 3, 2010 | by Andrew Kameka

Google

FTC likely to block Google-AdMob deal, developer says it’s “unsophisticated”

Wertago has been in contact with the FTC regarding the Google-AdMob acquisition that still requires FTC approval, but based on conversations it had with the commission, Wertago asserts that the FTC has no business getting involved in the matter.

In a lengthy but revealing blog post titled “Ignorance and Hubris at the FTC…,” Wertago argues that the FTC is “unsophisticated” in the mobile ad market and lacks the knowledge to properly assert the fairness of Google’s acquisition of AdMob.

This particular excerpt from the post says it best:

There is no way the FTC knows enough to support a decision to block the deal. The staff members we spoke to were not particularly knowledgeable about the mobile ad space they are considering interfering in, or about the technology sector more generally, or about mobile app development and monetization, or about the changes in the mobile advertising sector in the past year, or about the level of competition and pace of change and innovation in the market, however broadly or narrowly you define it. More generally, it seems obvious to us that the computer, web, and mobile technology sectors are so competitive and fast-moving that NO ONE has the knowledge, expertise, economic insight, or clairvoyance to say with much confidence precisely what effect the AdMob acquisition will have on competition in the market or on consumer welfare.

One could easily argue that the purpose of the call was to gain more information – after all, these are government employees, not mobile ad specialists – but Wertago found the conversation revealing enough to say the FTC is lost on the issue. Users can visit the Wertago blog to read their statement in full. It offers some interesting insight into how developers have attempted to monetize their apps, and shows that the mobile ad industry is competitive, according to Wertago.

Based on reports from BusinessWeek and other outlets, the FTC is likely to recommend that the AdMob acquisition be challenged. We previously suggested that the unveiling of Apple’s iAds might help the case, but it seems that the FTC simply doesn’t want to let Google and AdMob form the largest mobile ad company. The irony in this situation is that, “many ad networks likely start out tacitly HOPING to one day be bought out by Google, just as app developers tacitly hope to be bought out by this or that category-dominant player,” according to Wertago.

[Many thanks to S.B. for the tip!]