It’s nice to see that the Obama administration isn’t giving Google free reign over the Internet. But the U.S. Federal Trade Commission’s long review of Google’s $750 million deal to buy mobile ad network AdMob is getting ridiculous.
It appears the FTC may actually oppose the deal. This would be a huge mistake and a terrible precedent for the government to set. (Click here for our post with the latest news in the FTC’s Google-AdMob fiasco.)
The biggest reason for the FTC to approve Google’s deal immediately is that the mobile ad industry is way too small and way too premature for regulation.
Today, most of the mobile ads you see — as delivered by Google, AdMob, and other ad networks — are basically tiny versions of Internet ads. And yes, it is possible that Google and Apple will take charge of the market and never look back.
But it would be foolish for the Feds to say with absolute certainty that this is the only model for mobile advertising and the only direction it will grow in. Similarly, it would be absurd for the government to block a $750 million acquisition because of it.
Consider that it is just as possible that over the next five years, mobile advertising will grow in a direction that would give Google NO advantage, or even a disadvantage. Maybe Facebook will be the big winner in mobile advertising. Maybe Foursquare will be, or Twitter, or Groupon. Or maybe consumers will raise hell that ads are crapping up their phones and the mobile advertising market will never become very big.
But no matter what, it is way too early for the government to get involved and start blocking deals.
Over the next several years, as the mobile advertising market grows, dozens or maybe even hundreds of new companies will spring up. Some will succeed, some will fail.
As this happens, there will be consolidation and many more deals to come.
So shutting a deal down today just because Google is getting involved — obviously, the most successful Internet advertising company, which will MAYBE be successful in mobile advertising — is the wrong move. Longer term, blocking this deal could actually cause more harm to mobile advertising than approving it, if other consolidation can’t occur down the line.
Bottom line, the Feds must approve Google’s deal immediately and get out of the way.