In the tradition of the absurdly long FCC review of the Sirius XM deal, the U.S. government continues to show it has no sense of which technology deals to scrutinize forever and which to quickly approve.
There is simply NO REASON that it should have taken six months to approve this deal.
And it’s even more ridiculous that the FTC’s basis for approving the deal is largely that Apple is getting into the mobile ad industry.
Apple’s mobile ad division did not even exist when Google announced its deal for AdMob in early November. It wasn’t until several weeks later, in January, when Apple announced its acquisition of Quattro Wireless, and not until early April — three more months — when Apple announced its intentions in mobile advertising via the iAd mobile ad product.
What was the FTC doing from November until April?
As we’ve said repeatedly, there was only one REAL reason for the FTC to approve the Google-AdMob deal: the mobile ad industry is way too small and way too premature for regulation.
From our earlier post on the topic:
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.
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