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DOJ Begins Anti-trust Review Of Google/Admeld Deal

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The U.S. Department of Justice has started an antitrust review of Google’s $400 million acquisition of supply-side platform Admeld, sources tell paidContent, confirming earlier reports.

At this point, it appears to be a formality as Google buys another company, but concerns have been raised that Admeld would provide Google with a closed pipeline for the buying — through its demand-side platform Invite Media — and selling of display advertising.

But will that constitute an anti-competitive advantage for Google? (NSDQ: GOOG) A Google rep wouldn’t address the DOJ review, saying only, “This 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.”

The DOJ review will consider whether Google’s hegemony in search could make the Admeld deal anti-competitive, Bloomberg reported. The department will also consider the nature of Google’s expansion plans for Admeld and how it would affect the online ad market.

When the deal was announced, Frank Addante, CEO of Admeld competitor The Rubicon Project, issued a statement saying in part that “This acquisition and this type of business model is good for Google, but bad for publishers,” but he nevertheless told the WSJ earlier in the week that he didn’t think Google-Admeld deal will hinder competition in display.

“They have cash, and they have people, and they have technology on their side, but that doesn’t mean that they are going to win the game,” Addante said. “They have a lot of work to do.”

Given the fact that the approval process is seen as a formality, it is considered lengthy. That will certainly allow plenty of time for Rubicon and others in the space time to try to pick off Admeld’s publisher customers and gain greater market share, as pubs consider their approach to the real-time bidding and online ad exchange space, an area that has been growing rapidly as more marketers put their ad dollars into ad agency trading desks and DSPs. In terms of the outook, a recent Forrester study commissioned by Admeld predicted that spending on RTB will rise to $823 million in 2011, a 130 percent increase over 2010.