If Bloomberg’s reporting is accurate–and Google isn’t denying it–Google will have to pay mobile ad startup AdMob $700 million in cash if the FTC rejects the deal.That’s a mind-boggling number, considering that the purchase price is $750 million. But Google was apparently dumb enough to agree to it. So it’s AdMob’s gain.
But if you’re AdMob, are you really rooting for the FTC to approve the deal?
You want the FTC to reject the deal. Because then you get $700 million in cash AND you get to keep your company.
True, you’ve lost a potential buyer for a while (and a delirious one, at that), but now you have the opportunity to do lucrative deals with both Google AND Apple and continue to build your business. And if your business actually turns out to be a real business, then you can take it public in a few years and cash in again.
And, best of all, you’re playing with house money! You’ve got a huge war chest, courtesy of Google. You can use to double down on the business AND buy out any shareholders who are antsy for a quick payday.
So you can forgive the AdMob folks if they’re mumbling boilerplate about how they’re confident the deal will go through–while quietly holding all-night chanting sessions in which they pray that the FTC will reject it.