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US drops Google mobile ad probe

Eric thanks Steve

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The US Federal Trade Commission has dropped its probe into Google's acquisition of mobile advertising network AdMob.

And despite the bad blood boiling between Mountain View and Cupertino these days, proper etiquette suggests that Google CEO Eric Schmidt should pen a kind thank-you note to Apple CEO Steve Jobs.

"The Commission reached this decision [to drop the probe] based on important developments in the mobile advertising marketplace, particularly actions by Apple that should mitigate the anticompetitive effects of Google’s AdMob acquisition," the FTC's statement reads.

The FTC goes on to state the obvious particulars behind its decision. While the Commission was in the midst of its investigation of the anticompetitive implications of Google's AdMob acquisition, Apple acquired the third-largest mobile ad network, Quattro, and announced its own ad network, iAd, the money-making centerpiece of its upcoming update of the operating system for the iPhone/Pod/Pad, iPhone OS 4.0.

"The Commission has reason to believe that Apple quickly will become a strong mobile advertising network competitor," the FTC statement continues. "Apple not only has extensive relationships with application developers and users, but also is able to offer targeted ads (heretofore a strength of AdMob) by leveraging proprietary user data gleaned from users of Apple mobile devices."

In effect, the FTC is saying: "Okay, Google and Apple, go fight for mobile-advertising market dominance."

Which may or may not happen. Schmidt, who welcomed Apple's entry into the mobile ad market as "evidence of a highly competitive market," and Jobs, who's reported charging charter iAd advertisers up to $10m for the privilege, may simply divide the market between them rather than fight on the same battlefield — for the foreseeable future, at least.

After all, Apple has its iPhone, controls its SDK and its developers, and it's going so far as to produce all iAd content for early advertisers, at least until it "eventually" releases an iAd SDK. And even after the SDK allows advertisers to produce their own creative, Apple will still maintain approval control.

That's fine and dandy in the closed iPhone ecosystem, but it may not play well the the non-iPhone world. But that may not matter, since Apple has made no mention of any desire to move iAd into the third-party mobile world.

Google doesn't have the closed ecosystem of Apple, but it does have not only the rapidly rising Android platform, but also the netbook Chrome OS to be released this fall. And although Chrome OS will be more open than iPhone OS, it will be web-centric — and from that cloud will rain a torrent of ads.

As for the prospective bride in the Google/AdMob marriage, that mobile ad network seems simply happy to have the whole FTC investigation at an end. "We are extremely pleased with today’s decision from the Federal Trade Commission to clear Google’s acquisition of AdMob," said Omar Hamoui, AdMob founder and CEO in a statement. "Our focus is now on working with the team at Google to quickly close the deal." ®

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