Bloomberg News

Google’s AdMeld Deal Said to Win U.S. Antitrust Recommendation

December 12, 2011

Dec. 2 (Bloomberg) -- Google Inc.’s $400 million acquisition of AdMeld Inc. has been recommended for antitrust approval by U.S. Justice Department staff attorneys, two people familiar with the matter said.

The staff urged approval after a detailed analysis found that AdMeld’s competitors in online display advertising were strong enough to offer companies alternative ways to advertise, one of the people said. The recommendation still must be approved by senior department officials, said both of the people, who didn’t want to be identified because they weren’t authorized to speak about the matter publicly.

The recommendation contrasts with the department’s reservations about Google’s purchase of ITA Software Inc. In that case, the department required oversight of Google’s actions before giving approval because government attorneys determined online travel agencies that used ITA’s software, which aggregates flight information, didn’t have many alternatives.

AdMeld offers technology services to Internet publishers that help them boost revenue by managing display ads from hundreds of sources, including ad networks. Customers of the New York-based company, founded in 2007, include News Corp.’s Fox News and the Weather Channel.

Acquisitions, Purchases

The world’s largest Internet-search provider is using acquisitions to add services and find new sources of advertising. Mountain View, California-based Google made 57 acquisitions and purchases of intangible assets during the first three quarters of the year, according to an Oct. 26 regulatory filing.

Gina Talamona, a Justice Department spokeswoman, declined to comment on the staff recommendation. Adam Kovacevich, a Google spokesman, didn’t immediately respond to phone and e-mail messages after regular business hours yesterday. AdMeld didn’t’ immediately respond to a request for comment sent via its website.

AdMeld would help boost Google’s position in online display advertising, the segment that’s outpacing the broader market, according to Emarketer Inc., a New York-based digital research firm.

Google is expected to grab 9.3 percent of online display advertising spending in the U.S. this year, up from 8.6 percent last year, making it the No. 3 provider, according to EMarketer. Facebook Inc. will increase its share to 16 percent, the No. 1 position, up from 12 percent a year ago, while Yahoo! Inc. will drop to 13 percent from 14 percent, EMarketer said.

Google, which generates most of its revenue from advertising, posted higher sales during the third quarter as the number of clicks on ads rose about 28 percent and the average price per click increased about 5 percent. Sales, excluding revenue passed on to partner sites, rose to $7.51 billion.

ITA Condition

In April, the Justice Department cleared Google’s purchase of ITA Software for $676 million, on the condition it makes information available to search-engine rivals and lets the government review any complaints that it’s acting unfairly.

In August, Google said it would spend $12.5 billion for Motorola Mobility Holdings Inc., its largest deal. The Justice Department requested more information about the transaction as it extended its review, the companies disclosed Sept. 28. Google has said it expects to close that acquisition, announced in August, by the end of this year or in early 2012.

The Justice Department and the Federal Trade Commission share authority to sue to block mergers they consider anticompetitive and to review whether dominant companies are abusing their market power.

--With assistance from Brian Womack in San Francisco. Editors: Michael Hytha, Peter Blumberg

To contact the reporters on this story: Jeff Bliss in Washington at jbliss@bloomberg.net; Sara Forden in Washington at sforden@bloomberg.net

To contact the editors responsible for this story: Mark Silva at msilva34@bloomberg.net; Michael Hytha at mhytha@bloomberg.net


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