India Internet News
US Regulators Postponed Google's Admeld Acquisition Investigation
29 July 2011
The acquirement of Admeld, a business organization which offers an advertising platform for publishers, by Google is getting below increased antitrust scrutiny from the US Department of Justice.
On Wednesday, Google says through a blog comment that the department has inquired them for more details about the deal. Google had unveiled about the acquisition of Admeld a month ago. The acquisition cost was not disclosed but technology blog TechCrunch stated it was about $400 mn.
Google's Vice President of display advertising, Neal Mohan stated by a blog comment that, "We've been discussing this deal with the Department of Justice, who are obliged to review the transaction because of its purchase price. As they do for many acquisitions, they have sent us a 'second request,' which means that they are asking for more information in order to complete their review of this particular acquisition. This doesn't surprise us, as today's display advertising industry is very new and highly complex. But we'll work to enable this review to be concluded as quickly as possible."
Michael Barrett, the CEO of Admeld, said he was sure the agreement would be clarified but was "disappointed by this decision because it will delay our efforts to bring even more innovative services to our clients and partners."
Google, located in California and search engine giant, generates most of its revenue from advertising connected with Internet search but is looking to cut out a bigger slice of the market to show advertising with rich media, digital video and banner ads.
But according to Mohan, Google trust the show advertising business "is, and will remain, extremely competitive. In fact, since we announced this acquisition about a month ago, at least three new and expanded platforms for buyers and publishers have been launched. Others continue to grow."
Based on digital marketing company eMarketer, Facebook is on the way to cross Yahoo! in US display advertising income this year whereas Google will also gain market share. eMarketer study shows Facebook's share of US online display ad revenue will rise to 17.7 percent this year, increasing from 12.2 percent last year, whereas Yahoo!'s share is assumed to decrease to 13.1 percent in 2011 from 14.4 percent last year. And Google's share will rise to 9.3 percent this year from 8.6 percent last year.
Google has entered for growing regulatory review in the US and Europe as it has developed from a scrappy startup into an Internet titan.
Among the agreements that have pulled scrutiny are Google's $3.1 billion acquisition of online ad company DoubleClick, its $750 million acquisition of mobile ad network AdMob and its $700 million acquisition of flight data company ITA Software. In 2008, Google was forced to leave plans for a united search advertising partnership with Yahoo! against opposition from the Justice Department.
Google also stated last month that it was assisted by a US Federal Trade Commission probe into its search and advertising business.