US watchdog the Federal Trade Commission has closed its investigation of Google’s proposed acquisition of mobile advertising network AdMob, concluding that the deal is unlikely to harm competition in the nascent mobile advertising market.

The decision may come as a surprise to some, as it gives Google some serious oomph in the mobile advertising space, and curiously, Google has Apple to thank for the FTC’s verdict.

“Although the combination of the two leading mobile advertising networks raised serious antitrust issues, the agency’s concerns ultimately were overshadowed by recent developments in the market, most notably a move by Apple Computer Inc. – the maker of the iPhone – to launch its own, competing mobile ad network,” the FTC said in a statement. In addition, the watchdog notes that a number of other firms, “Appear to be developing or acquiring smartphone platforms to better compete against Apple’s iPhone and Google’s Android, and these firms would have a strong incentive to facilitate competition among mobile advertising networks.” These “other firms” are presumably Nokia/Symbian, HP/Palm, Microsoft, and the homegrown Linux guys like Samsung and LG.

“As a result of Apple’s entry (into the market), AdMob’s success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob’s competitive significance going forward, whether AdMob is owned by Google or not,” the Commission’s statement explains.

According to analyst house IDC, the deal gives Google a clear lead in the mobile advertising space in the US at least. At the end of 2009, AdMob was estimated to have 11 per cent of the US market, while Google had 10 per cent. The nearest competitors are Millennial Media with 12 per cent and Yahoo with 10 per cent. Apple’s newly acquired operation, Quattro Wireless, has 7 per cent.

Market research firm eMarketer said the mobile advertising g market in the US is set to grow from $593m in 2010 to $1.56bn in 2013.

But not everybody is so happy to hear the news. Simon Buckingham, CEO of Appitalism and a long time campaigner against Google’s acquisition of AdMob, believes the move will dramatically increase the cost of advertising for app developers, especially given that the Quattro has been acquired by Apple.

“The FTC’s decision to allow Google’s acquisition of AdMob allows the clear number one and two players in the mobile advertising market to merge. This means that advertisers really have no place to go to buy mobile advertising on non-Apple platforms other than Google as Quattro focuses more and more on iAds,” Buckingham said.

The Appitalism CEO also warns that Google hasn’t yet launched its AdSense for mobile apps program commercially but when it goes commercial, he claims Google will control the vast majority of mobile advertising inventory worldwide.

Google's acquisition of AdMob

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