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FTC pressures Echofon to blast Google's AdMob acquisition

updated 09:35 pm EDT, Mon May 17, 2010

Dialogue described as an "interrogation"

Naan Studio, the software developer behind Echofon Twitter apps, has detailed its experience dealing with the FTC over Google's acquisition of AdMob. In a company blog, staff member Chika suggests the FTC pressured her to criticize the deal despite Naan's overall support for the acquisition. The dialogue was described as more of an "interrogation," while the FTC reportedly dismissed the company's larger concern over Apple's rival deal with Quattro Wireless.

AdMob initially asked Naan to submit a letter to the FTC supportive of the deal with Google. During the following testimony, Chika voiced hope that AdMob and Google could provide an even better solution, as the mobile at market is still relatively young and none of the single ad networks work perfectly. The deal was also said to potentially provide a "good counterbalance" to Apple's acquisition of Quattro Wireless.

Naan had experienced very high ad rates in the first month on Google, before the rates dropped significantly. Although the company suggested the anomaly could be attributed to a variety of different factors, the FTC allegedly interpreted the comment as evidence of unfair bait-and-switch tactics.

"The FTC staff kept going back to the possibility that Google did the bait-and-switch intentionally, and I had to say we had no proof for that several times," Chika said.

The company was even more concerned with the FTC's seemingly nonchalant attitude toward the Apple/Quattro deal. An FTC staff member reportedly labeled the discussion irrelevant, despite growing fears that Apple will use the iPhone SDK terms to give itself an unfair advantage over rival advertisers on its range of mobile devices.

Chika claims that the FTC continued to resist mentioning the Apple/Quattro concerns in the official declaration that was produced from the conversations. The full argument was only included after several insistent requests.

"To me, the problem was that the FTC seemed to be determined to stop the deal from the beginning," Chika said. "Though they did agree to put together the declaration close enough to my belief in the end, I felt I was pressured to say things in a way that met their goal."

Although the FTC has yet to announce a final decision on the matter, regulators are expected to oppose the deal. Google CEO Eric Schmidt recently admitted that his company would still pay AdMob $700 million even if the acquisition deal is blocked by the government.

by MacNN Staff



  1. Spacemoose

    Joined: Dec 1969


    Apple/Quattro is Irrelevant

    With Google/AdMob, the world's largest and hugely dominant internet advertiser is seeking to purchase the world's largest mobile app advertiser.

    With Apple/Quattro, you have a company that does not have any stake in advertising seeking to purchase the world's second largest mobile app advertiser.

    There's a world of difference there. Whether Apple owns Quattro or not does not affect the makeup of the advertising space. There will still be the same number of players with the same competitive share of the market. The only thing that will change is the name of the company that owns Quattro's share of the ad market.

    Now, if Apple were to change its SDK or do other things to make the app advertising market less competitive, there may be a secondary issue at stake, but that hypothetical scenario has no bearing on the FTCs hesitancy to offer up Google a huge monopoly on web and mobile advertising.

  1. iphonerulez

    Joined: Dec 1969


    I still don't see how Apple is having an

    unfair advantage while staying within its own platform which doesn't even have major market share. There must be something is just don't quite understand about this anti-trust stuff. Is there even any guarantee that iAd is even going to do that well?

    Could they say something like Android has an unfair advantage of gaining market share since it doesn't cost anything to license it?

  1. peter02l

    Joined: Dec 1969


    comment title

    "The deal was also said to potentially provide a 'good counterbalance' to Apple's acquisition of Quattro Wireless."

    Good counterbalance? The largest computer search company buys the largest mobile search company to keep it away from Apple is good counterbalance? In fact, it is Apple purchase of Quattro Wireless which ended up being any sort of counterbalance - good or bad is yet to be determined.

  1. elroth

    Joined: Dec 1969


    she's too sensitive

    Someone should tell her that any issues with Apple/Quattro are separate. The fact that Quattro exists is a point to be considered in looking at Google/AdMob, but any possible problems with Apple/Quattro is irrelevant to the investigation of Google/AdMob.

    Also, what does she expect, when she is asked by AdMob to write a letter supporting the deal? She's going to get questioned, even cross-examined - it's not putting pressure on her to oppose the deal, it's making sure she's telling the whole story.

    Funny that Google lowered the ad rates significantly just when the deal is being investigated. If advertisers think the lower rates are going to continue after the deal is approved, they're pretty naive..

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