Three Reasons The Justice Department Should Stop The Google-AdMob Deal
AdMob, based in San Mateo, Calif., already serves ads for Apple's iPhone and a variety of platforms including Google Android operating system-based smartphones.
The acquisition must still be approved by government regulators. And Google has already attempted to squelch any antitrust concerns by claiming that the mobile advertising space will remain highly competitive. Here are three reasons why the U.S. Justice Department should stop the acquisition.
1. It Will Kill A Thriving Mobile Advertising Display Business
Google is right. There are more than a dozen mobile ad networks in the U.S. with companies like Quattro Wireless, Millenial and Jump Tap. What do you think will become of those healthy competitors when the company that has a virtual stranglehold on the online search advertising market uses all its might and muscle to shut mobile advertising display competitors down.
The smartphone and mobile advertising market is just developing. We don't need a monopoly ad power player coming in and wreaking havoc on an industry that is still in its infancy.
This is the kind of emerging market where the Justice Department needs to be proactive so that consumers and businesses are not backed into a corner and forced to deal with ONE ad player rather than having the option of choosing many different companies.
What the Justice Department has to consider is simple: will the deal lead to more choices or fewer choices for mobile/smartphone manufacturers looking to build a business?
All the Justice Department has to do to come up with the right answer is look closely at the facts regarding how Google has forced any and all comers to play its search game.
2. It Will Snuff Out Mobile/Smartphone Developer Creativity
The lack of an advertising monopoly in the mobile/smartphone market has a wave of companies experimenting with different business models.
Google's decision to enter the game, in effect, freezes any and all experimentation. Google's dominant position in the desktop search market means that all companies are going to wait for Google to wield its search influence before making any development decisions that could leave them out of the Google mix.
Every mobile and smartphone player in the market is huddling in conference rooms today feverishly looking at what they can do to make sure their development teams are on the same page as Google.
Think about it, thousands of developers were working to come up with a better mobile/smartphone mousetrap. Now they are looking at how to play the Google game.
3. Google is Already Too Powerful
The fact is Google is already too powerful in the general ad display market and now is looking to extend that monopoly position into the mobile market. Google will use any and all its power in the general ad display market to snuff out the competition in the mobile/smartphone market.
The Google-AdMob deal is a lot different than Microsoft acquiring ScreenTonic, Yahoo acquiring Actionality or AOL acquiring Third Screen Media. Microsoft, Yahoo and AOL were NOT trying to extend a monopoly in the desktop search market to the mobile/smartphone market. Google is doing just that.
What's more, Google already has a mobile market share position with its Google Android operating system platform. The AdMob deal will force more application and content providers into the Android camp and limit their options at a time when they are already being squeezed by the Apple iPhone App Store (Some claim that only five percent of the 100,000 iPhone application providers make money off of the iPhone App Store platform).
All this Google talk about a mobile ecosystem is a joke. The mobile ecosystem has just been whacked across the head with this acquisition and will only recover if the deal is stopped.
There is a reason that Google is going to great lengths to claim its AdMob acquisition will not stifle competition. Google knows how much power it has in the desktop display advertising business and wants to extend its influence into the mobile market in one fell swoop with the AdMob deal.
Don't fool yourself. Once this deal closes, there will be fewer choices for mobile/smartphone manufacturers, application developers and users. Less competition. Fewer choices. That's the net result of the Google-AdMob deal. And that's what the Justice Department should consider when reviewing the deal.