Antitrust senator seeks Google/AdMob scrutiny

WASHINGTON Tue Apr 6, 2010 4:57pm EDT

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WASHINGTON (Reuters) - U.S. antitrust regulators should give "close scrutiny" to search engine giant Google Inc's planned acquisition of mobile advertising leader AdMob, a leading antitrust senator said on Tuesday.

The U.S. Federal Trade Commission, one of two agencies to assess deals for antitrust concerns, is reviewing the acquisition. In November, Google announced plans to acquire mobile advertising firm AdMob for $750 million.

"This acquisition, if consummated, would combine Google, with a dominant share of Internet search and Internet search advertising ... with AdMob, the leading provider of advertising to mobile devices commonly known as 'smart phones' (such as the Apple iPhone)," wrote Sen. Herb Kohl, chairman of the antitrust subcommittee of the Senate Judiciary committee.

In his letter to FTC Chairman Jon Leibowitz, Kohl noted the explosive growth of mobile advertising as a market and added that it was important "to be wary of any transaction that would create undue market dominance of search or application-based advertising on mobile devices."

Kohl noted, however, that he had not reached a conclusion on whether the FTC should challenge the transaction.

Google has said that it expects the rates that companies pay for search ads on mobile phones could exceed those for its personal computer-based ad business as powerful smartphones become more popular. Google Engineering Vice President Vic Gundotra said last month that mobile ad rates had increased "dramatically" in recent years.

(Reporting by Diane Bartz; Editing by Richard Chang)

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