Due to a recent ruling by the Federal Trade Commission (FTC), the throw-down between Google and Apple is officially on. In a 5-0 ruling, the FTC officially gave its blessing to Google’s purchase of AdMob, a $750 million deal announced in November 2009. Prior to the acquisition, Google and AdMob, which often appeared on the Apple iPhone, were fierce competitors.
The proposed deal was a red flag to the FTC, which was concerned about potential antitrust issues. In an ironic turn, the FTC’s approval of the purchase was based on Apple’s entrance into the mobile space. Apple, which had previously flirted with acquiring AdMob, instead purchased Quattro Wireless for $275 million and announced iAd in January of this year. In dropping its investigation of Google, the commission also cited the fact that “a number of firms appear to be developing or acquiring smart phone platforms to better compete against Apple’s iPhone and Google’s Android. These firms would have a strong incentive to facilitate competition among mobile advertising networks.”
Although thus far, mobile advertising has failed to live up to its hype, it’s safe to say that the investments by Google and Apple are a vote of confidence in their respective platforms and the mobile business model. A recent report from ABI Research buttresses the bullish attitude; the company’s analysts predicted that mobile marketing and advertising combined will grow at 40 percent CAGR (compounded annual growth rate) over the next five years, “bringing the numbers substantially higher than the well under a half billion dollars spent in total in 2009.”