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Apple's iAd leads government to extend Google-AdMob review

post #1 of 10
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The U.S. Federal Trade Commission has extended its review of Google's proposed purchase of AdMob by two weeks, as the federal agency will use the time to gauge the impact of Apple's iAd mobile advertising platform.

According to The New York Times, the initial agreement between Google and the FTC was set to expire last Monday. Now, a decision on the deal is expected as soon as Friday.

The report also reiterated that the FTC has been leaning toward opposing the deal, on the grounds that the combination of Google and AdMob would create a company too powerful in the mobile ad space. But as the FTC has scrutinized the deal, Google has highlighted Apple's purchase of Quattro Wireless and subsequent iAd announcement as evidence that there is competition in the market.

The Times reported that the FTC's review could be complicated by "Apple's famous reluctance" to disclose its business plans.

"It is unclear what kind of effect that the iAds system, which Steven P. Jobs, Apples chief executive, unveiled last month along with new software for the iPhone, could have on the overall mobile ad market," the report said. "Apple's iAds, unlike mobile ads from Google and AdMob, will appear only on the iPhone, and the system will cater exclusively to high-end advertisers, at least at first."

Some alleged details were uncovered late last month, as Apple has been pitching iAd to potential buyers. The Cupertino, Calif., company has reportedly set an initial fee as high as $10 million to advertise with iAd at launch -- much higher than the $100,000 to $200,000 that most companies pay with existing mobile advertising deals. After the initial high-priced launch, Apple aims to charge close to $1 million for ads on its mobile devices this year.

Advertisers would be charged a penny each time a user sees a banner ad under the proposed plan. Tapping on the banner brings up the interactive advertisement within a mobile application, and Apple charges the advertiser $2. A $1 million ad buy would gain an advertiser $1 million worth of ad views and user taps.

Signs of trouble in the $750 million Google-AdMob deal first arose in early April, when a report alleged that staff with the FTC were prepared to recommend blocking the purchase for anticompetitive reasons. Sources at the time told Reuters that Google's purchase of the largest mobile advertiser could present a "significant competitive problem" in the advertising market space.

Soon after the planned acquisition was announced, consumer groups asked the FTC to block Google's planned purchase of AdMob, citing both antitrust and privacy issues. The group alleged that the combination of Google and AdMob "would be harmful to consumers, advertisers and application developers."

Google tried to offset some of the negative buzz surrounding its AdMob acquisition and belief that it could be anticompetitive by highlighting Apple's purchase of rival mobile ad firm Quattro Wireless. Apple's acquisition paved the way for the iAd announcement, which Google cited as evidence of growing competition in the market, and justification for the AdMob deal. Google went as far as sending e-mails to reporters in order to keep them apprised of rumors surrounding Apple's anticipated iAd platform before it was announced.

Soon after, at its introduction of iPhone OS 4, Apple unveiled the iAd platform, which will allow developers to include richly interactive ad experiences that offer unique content within a mobile application. Developers will keep 60 percent of the revenue earned from the advertisements, according to the term's of Apple's plan.

As the FTC has inquired with developers and AdMob about the Google deal, it has also reportedly been asking questions about Apple's iAd. The questions are said to relate both to the possibility of a Google-AdMob deal, as well as concerns from existing mobile ad networks, who complained to regulators that changes to Apple's iPhone developer agreement could give the Cupertino, Calif., company a leg up on its competition.

At that April introduction of iAd, Apple co-founder Steve Jobs admitted that Apple tried to buy AdMob, but the company was "snatched" by Google before the iPhone maker could close the deal. One report alleged that AdMob had agreed to a 45-day "no-shop" provision with Apple, to prevent the sale to another company. But as soon as that provision expired, Google pounced and paid $750 -- a premium price that the search giant was reportedly willing to pay to keep the company away from Apple. Apple then settled for Quattro Wireless for $275 million.
post #2 of 10
And this is the crap the FTC is looking into while banks come up with every possible method of taking money from consumers. Man I love the FEDS!
post #3 of 10
Quote:
Originally Posted by macdanboy View Post

And this is the crap the FTC is looking into while banks come up with every possible method of taking money from consumers. Man I love the FEDS!

Same deal with the antitrust the DOJ and FTC are looking into on behalf of Adobe against Apple. Seems to me, and others, that banks gambling with taxpayers money would be more important than the iPad and iPhone not playing Farmville.

http://www.9to5mac.com/robert_reich_...e+Intelligence)
"One who forms a judgement on any point but cannot explain it clearly, might as well never have thought at all on the subject." Pericles
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"One who forms a judgement on any point but cannot explain it clearly, might as well never have thought at all on the subject." Pericles
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post #4 of 10
Google is a mess...

"We buy a lot companies, and do absolutely jack [expletive] with them"
post #5 of 10
I would like to see the competition between Quattro and AdMob under the tutelage of two well-financed companies -- Google and Apple. Here Google has a greater market share already, i.e., where it could port AdMob ads.

My concern for Apple is that it is pricing its ads too high so that only a very elite group of companies could afford them. Also, advertising revenue is very sensitive to the health of the economy. Google knows this too well.

Apart from the two, there are many other well-heeled and very creative advertising giants and some small but very creative nonetheless, and quite a few of them are not based in the US.

CGC
post #6 of 10
Quote:
Originally Posted by cgc0202 View Post


My concern for Apple is that it is pricing its ads too high so that only a very elite group of companies could afford them.

CGC

Similar to the iTunes LP. It's a great idea, and the industry pushed Apple to offer it, but it was simply too expensive for a lot of companies to see putting all that money into when there wasn't any guaranteed return on the investment.

That being said, I was impressed by Steve's demo of iAd. When compared with what Google's offers, I could certainly see a lot of companies jumping on board.

These are the same companies that pay millions of dollars to get a 30 second spot during the Super Bowl. They won't flinch to be part of an audience of 85+ million for a measly $10m.
"One who forms a judgement on any point but cannot explain it clearly, might as well never have thought at all on the subject." Pericles
Reply
"One who forms a judgement on any point but cannot explain it clearly, might as well never have thought at all on the subject." Pericles
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post #7 of 10
Quote:
Originally Posted by cgc0202 View Post

My concern for Apple is that it is pricing its ads too high so that only a very elite group of companies could afford them. Also, advertising revenue is very sensitive to the health of the economy. Google knows this too well.

Apart from the two, there are many other well-heeled and very creative advertising giants and some small but very creative nonetheless, and quite a few of them are not based in the US.

CGC

To be honest I'm not well versed in any of this. That being said if I'm going to inundated with ads I'd rather see advertising from "elite" companies than ads for Viagra or ambulance chasing lawyers.
post #8 of 10
Quote:
Originally Posted by crawdad62 View Post

To be honest I'm not well versed in any of this. That being said if I'm going to inundated with ads I'd rather see advertising from "elite" companies than ads for Viagra or ambulance chasing lawyers.

I am most certain, considering what Steve Jobs stated when the iAds was introduced that there will be none of the kind of advertising that Google is infamous for. iAds would never be text ads -- the kind of ads that made the Google empire a very profitable business. I considered Google ads for my sites, just to help subsidize the cost, but in the end, I decided not to do it because of what you stated.

If it was like the demo, it looks like you have to consciously click on the ad to view the Ad content. If this is the case, I hope none of those streaming ads that would request cookies to invade your computer.

Expect the iAds to show more in free Apps, after all the developers of these Apps have to earn money. It is this group that Apple must consider as target sites for the iAds. The pricing of the ads must be such so that they are affordable to companies that would target the potential customers of such Apps.

Nonetheless, it is unlikely that the price of the iAds, even if made more modest, would not be affordable to the sellers of Viagra or ambulance chasing lawyers. Based on my perception of the aesthetic sensibilities of Steve Jobs, even if these unwanted advertizers can afford iAds, SJ/Apple would not likely allow their ads.

In a related matter, I find it arrogant sometimes when some posters in previoous articles proclaimed their opposition to ads in free Apps. They could have just registered their opposition by not downloading those free Apps.

Quote:
Originally Posted by Motlee View Post

Similar to the iTunes LP. It's a great idea, and the industry pushed Apple to offer it, but it was simply too expensive for a lot of companies to see putting all that money into when there wasn't any guaranteed return on the investment.

Lessons learned for Apple and the large music companies, I hope.

Quote:
Originally Posted by Motlee View Post

That being said, I was impressed by Steve's demo of iAd. When compared with what Google's offers, I could certainly see a lot of companies jumping on board.

Same reaction here. I would surely click on ads that I would have interest in and will provide more useful information.

Quote:
Originally Posted by Motlee View Post

These are the same companies that pay millions of dollars to get a 30 second spot during the Super Bowl. They won't flinch to be part of an audience of 85+ million for a measly $10m.

I do not think that even those thirty second ads cost as much as those of the pricing being bandied for the iAds, especially after you include the cost per click. The audience for the Super Bowl too is much much larger. Then, if a company truly creates a great ad, the company ad gets further exposure (for free) considering how these ads are then replayed in many programs by various tv networks or even in print media buzz.


CGC
post #9 of 10
How would delaying for two weeks help? iAds won't be in use until iOS4.0 and it wont be out till somewhere in June at the earliest? So there is nothing for the FTC to review just yet.
post #10 of 10
Quote:
Originally Posted by AppleInsider View Post

The U.S. Federal Trade Commission has extended its review of Google's proposed purchase of AdMob by two weeks, as the federal agency will use the time to gauge the impact of Apple's iAd mobile advertising platform.

According to The New York Times, the initial agreement between Google and the FTC was set to expire last Monday. Now, a decision on the deal is expected as soon as Friday

Monday to Friday = 5 days.
2 weeks = 14 days.
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