Jun 192011

The U.S. Justice Department is reviewing Google’s bid for
display ad provider Admeld, sources familiar with the DOJ’s plans told Bloomberg and others.

Google June 13 agreed to buy Admeld, which helps large publishers select and support ads
from myriad ad networks, including Advertising.com, Google’s own DoubleClick Ad
Exchange and Yahoo’s Right Media. The purchase is rumored to be in the $400
million range.

The DOJ, which declined to comment, will consider whether
adding Admeld would be anticompetitive given Google’s strength in search
advertising, Bloomberg said. Investigations into Google’s large acquisitions have become a regular occurrence, dovetailing with the company’s growing power online.

The DOJ wants to make sure Google isn’t stepping over
any boundaries for fair competition with Admeld, whose so-called “yield
optimisation” software could help the search engine boost its growing lead
in the market for display ads.

Though it has long been the undisputed leader in
text-based search ads, Google until last quarter had lagged behind Yahoo in display ads, those
often flashy banners that catch Web users’ attention when they visit their
favorite Websites.

IDC said Google’s U.S. display ad revenue share grew to 14.7 percent in the first
quarter of 2011 from 13.3 percent from the fourth quarter of 2010, passing
Yahoo for the first time.

Many ad experts have argued Admeld’s technology is one of
the last major puzzle pieces Google had yet to add as it seeks to expand it ad
purview. Asked whether the DOJ had contacted it about a possible review, a
Google spokesperson told eWEEK:

“The acquisition is designed to help publishers get
the most from the rapidly growing display advertising industry, which is both
complicated and incredibly competitive — the emergence in recent years of a
huge variety of technologies for publishers, like Admeld’s, is great evidence
of that.”

That statement makes it clear that Google will argue that
the deal is pro-competitive at a time when the display ad market is growing increasingly

This is similar to the arguments Google made to the
Federal Trade Commission, which reviewed both the company’s $3.1 billion bid for
DoubleClick in 2007, as well as the search engine’s $750 million play for mobile
ad maker AdMob last year. The FTC ultimately clear both bids.

Interestingly, despite the FTC’s prior
experience with mulling Google’s ad market moves, it is the DOJ that is setting
its sights on the latest bid.

This could be because the FTC is reportedly mulling a
broad scope investigation into Google’s search and search ad practices. Smaller
rivals have accused the company of abusing its power in the markets it serves.

The DOJ and the FTC negotiate over which agency will
handle major antitrust investigations; the winning investigator tends to have some
knowledge of how an industry works. The
DOJ investigated and cleared Google’s $700 million bid for ITA Software this year.


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