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Friday, May 21, 2010, 09:50 am PT (12:50 pm ET)

FTC approves Google-AdMob deal, cites competition from Apple's iAd

The U.S. Federal Trade Commission voted 5-0 on Friday to approve Google's $750 million acquisition of mobile advertising firm AdMob, citing Apple's iAd as increasing competition in the marketplace.

The commission issued a statement Friday saying that Apple's move to launch its own advertising network "overshadowed" concerns of antitrust issues in Google's acquisition of AdMob.

"As a result of Apple’s entry (into the market), AdMob's success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob's competitive significance going forward, whether AdMob is owned by Google or not," the FTC said in a statement.

It went on to say that mergers in "fast-growing new markets like mobile advertising" should not be subjected to the same level of scrutiny as businesses in other markets might have to endure.

"Though we have determined not to take action today, the Commission will continue to monitor the mobile marketplace to ensure a competitive environment and to protect the interests of consumers," the commission said.

The FTC determined that "Apple is poised to become a strong competitor in the mobile advertising market," through its purchase of Quattro Wireless and forthcoming iAd rollout on the iPhone OS platform. Apple can also leverage close relationships with application developers and users, the commission said, in addition to a large amount of proprietary user data.

"We are extremely pleased with today’s decision from the Federal Trade Commission to clear Google's acquisition of AdMob," Omar Hamoui, AdMob founder and CEO said in a statement. "Over the past six months we've received a great deal of support from across the mobile industry — and we deeply appreciate it. Our focus is now on working with the team at Google to quickly close the deal."

Previous reports suggested the FTC was leaning toward opposing the deal on the grounds that the combination of Google and AdMob would create too powerful a company in the mobile ad space. The FTC took an extra two weeks to review the AdMob deal as it sought more information on Apple's purchase of competing mobile ad agency Quattro Wireless.

Apple has big plans for its own mobile advertising venture, dubbed iAd, set to debut this summer. Google highlighted Apple's entrance into the advertising market as evidence of competition in the marketplace, in hopes that it would help to convince the FTC to approve its acquisition of AdMob.

After a deal was struck in late 2009, consumer groups asked the FTC to block Google's planned purchase of AdMob, citing both antitrust and privacy issues. The group alleged that the combination of Google and AdMob "would be harmful to consumers, advertisers and application developers."

Before Google bought AdMob, Apple tried first, Steve Jobs admitted in April when iAd was introduced. But AdMob was "snatched" by Google before Apple could close the deal, he said.

One report alleged that AdMob had agreed to a 45-day "no-shop" provision with Apple, to prevent the sale to another company. But as soon as that provision expired, Google pounced and paid $750 million — a premium price that the search giant was reportedly willing to pay to keep the company away from Apple. Apple then settled for Quattro Wireless for $275 million.