* FTC staff prepared to recommend to sue - source
* Staff could still change course - source
By Alexei Oreskovic
SAN FRANCISCO, April 6 Lawyers at a U.S.
regulator plan to recommend that the government try to block
Google's (GOOG.O) proposed acquisition of mobile advertising
firm AdMob on antitrust grounds, a source familiar with the
"The staff (at the U.S. Federal Trade Commission) believes
there is a significant competitive problem and they are
prepared to make a recommendation to sue," the person said,
speaking on condition of anonymity.
The source noted that the staff lawyers at the FTC could
still change their opinion as negotiations with Google, the
world's No.1 Internet search engine, progress.
The move comes as Google, which generated 97 percent of its
$23.7 billion in 2009 revenue from advertising, faces a growing
list of investigations in the United States and Europe on
issues of competitiveness.
Earlier on Tuesday, the Wall Street Journal reported that
the FTC has assembled an internal litigation team to prepare
for a possible effort to challenge Google's AdMob deal and that
it had briefed Congress about its concerns about the deal.
Any recommendation by the FTC staff to sue would still have
to go through several more steps, including approval by the
director of the FTC's Bureau of Competition as well as by the
agency's commissioners, before the government acted, said
Google did not respond to requests for comment.The FTC was
not immediately available for comment.
Regulators have been reviewing Google's $750 million deal
to acquire AdMob for months. Google announced the deal in
November and said in December that it had received a second
request for information from the FTC.
For Google, acquiring AdMob would help bolster its ad
business on the popular new breed of smartphones like Apple
Inc's (AAPL.O) iPhone and Google's Nexus One.
In January, Apple acquired Quattro Wireless, a mobile
advertising firm that provides similar services to AdMob, for
an undisclosed amount.
On Tuesday, U.S. Senator Herb Kohl, the chairman of the
antitrust subcommittee of the Senate Judiciary committee, sent
a letter to the FTC urging "close scrutiny" of the deal. He
noted in the letter that he had not reached a conclusion on
whether the FTC should challenge the transaction.
In an earlier statement in response to the Wall Street
Journal article, Google said it was continuing to work with the
FTC and that there was "overwhelming evidence that mobile
advertising will remain competitive after this deal closes."
The potential AdMob challenge is the latest example of the
increasing regulatory scrutiny which Google has experienced as
it has grown. The U.S. Department of Justice has challenged
Google's settlement with book publishers and authors' groups
that would allow the search giant to create an online digital
In February, Google said that European regulators were
looking into complaints from three companies, one owned by
Google rival Microsoft (MSFT.O), about Google's search ranking
(Reporting by Alexei Oreskovic; Editing by Valerie Lee)