Right now the mobile ad market is tiny - and largely dominated by Apple's apps. Just ask Google, which has protested the anti-trust inquiries into its proposed $750 million acquisition of AdMob. Its main argument has been the market is too small and too fragmented for any one firm to dominate. But will Google’s entry into the space change that? The Federal Trade Commission is showing signs that it thinks so - regulators there are seeking sworn statements from its competitors and advertisers about any possible adverse impact Google could have on the market, according to Bloomberg News.
On the Radar
The proposed deal has been on their radar ever since it was announced. In December the FTC told Google it was making a second inquiry into the deal, according to a Google blog post. Putting on its game face, Google assured consumers that such inquires are routine and the deal will be approved eventually. But then two consumer organizations - the Consumer Watchdog and Center for a Digital Democracy - urged the FTC to block the deal entirely. Now it appears as though the FTC is giving it a more rigorous scrutiny than Google might have liked.
The irony is that the mobile ad market is so dynamic right now it will likely be almost unrecognizable in a few years - with or without Google's entrance into this space. "The mobile advertising industry is set to grow significantly, with reports suggesting that it will exceed $6.5 billion by 2012, but the majority of this will be simple text-based ads," Philip Sugai, Professor of Marketing and director of the Mobile Consumer Lab at the International University of Japan, tells MarketingVOX.
"But I believe that most estimates are overlooking the powerful new possibilities that AdMob and related services bring. Once advertisers can begin to build relationships between products, people, the location of these people, and the time of day, an entirely new world of advertising and marketing will be born.” Also lost in the debate is the impact that Apple's acquisition of Quattro may have, observed Boris Fridman, CEO of Crisp Wireless. "Today the space is diverse, and there is no one dominant player," he told the E-Commerce Times, "but these two acquisitions are setting a big battlefield for only two very large players."
If both deals go through, it will be "an epic battle," he predicted.
What About Quattro
Indeed Apple's proposed purchase of Quattro is perhaps even more significant than Google’s AdMob deal. The company rarely makes acquisitions and by expanding into this space suggests that Apple is among those companies that believe mobile computing will be the main way consumers access the internet in the future. It also suggests that Apple is seeking to monetize its huge user base more directly, and will be moving beyond its main business models of the App Store and subscriptions.