Google to fight US govt if AdMob deal blocked

Tue May 18, 2010 7:55pm EDT

* Google CEO expects AdMob decision in a few weeks

* Says AdMob acquisition is "very strategic"

* Apple's iPhone developers' decision is "discriminatory"

NEW YORK, May 18 (Reuters) - Google Inc (GOOG.O) Chief Executive Eric Schmidt said on Tuesday his company is prepared to fight the U.S. government "very hard" if regulators block the search leader's acquisition of mobile advertising firm AdMob.

Schmidt said AdMob had been left at a "significant disadvantage" in competing with rivals like Apple Inc (AAPL.O) due to the hiatus as regulators have closely reviewed the $750 million acquisition, which was announced in November. He said he expects a decision in a few weeks.

In an interview with Reuters Insider, Schmidt was asked what Google would do in the event of the Federal Trade Commission (FTC) suing to block the deal.

"We're likely to fight very hard," he said. "It's a very strategic acquisition for Google.".

Google, which generates the majority of its profits from search advertising to Internet users on personal computers, sees its future on wireless phones and software. The company has its own mobile operating system called Android for a range of phones and this year also unveiled its own phone called the Nexus One.

The move to the mobile phone has put Google in more direct competition with Apple, whose successful iPhone has also been supported by a move into advertising with the acquisition of Quattro Wireless in January.

Apple recently changed the terms of service for iPhone application developers to restrict them to using Apple's tool to build their programs and from sharing certain iPhone data with third parties.

Adobe Systems (ADBE.O), the maker of Flash software, is one of the companies whose software can't be used by these developers. Apple's recent moves have attracted interest from the FTC, according to reports.

Schmidt said Apple's changes in terms of services "discriminatory against other partners."

Schmidt said he hoped the AdMob acquisition could be completed to allow it to compete with rivals like Apple.

"It would be better if the AdMob acquisition can be approved to see if Google can get a more competitive market on the iPhone platform."

Schmidt, who was previously an Apple director, stepped down from Apple's board last August when it became clear the two companies would be competing more directly in the wireless space.

He insisted that he and Apple CEO Steve Jobs remain good friends and that the two companies will remain both rivals and collaborators in different business areas.

"The relationship will continue to be complicated," he said. (Reporting by Yinka Adegoke; Editing by Gary Hill)

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