Google CEO says Apple helped AdMob deal

Apple's plunge into the advertising market announced this past week gave Google a big boost in arguing for regulators to approve its acquisition of mobile advertising leader AdMob, Google CEO Eric Schmidt said yesterday.

US antitrust enforcers are apparently concerned the AdMob purchase could hurt applications developers, who often sell their apps for very little and make their money by selling advertising space on them.

But Schmidt, speaking after a speech at the American Society of News Editors, said Apple's plan to make a foray into the advertising market with iAd, was "evidence of a highly competitive market."

"It just seems obvious to me," said Schmidt. "I hope it (Google's purchase of AdMob) gets approved."

Apple's new advertising platform for the iPhone and iPad - dubbed iAd - marks Apple's first move into a small but growing market.

With iAd, applications developers will pocket 60 per cent of the revenue. Apple will sell and host the ads.

Apple's entry into the mobile ad arena had been widely expected. It paid $270 million (£174 million) for Quattro Wireless, an advertising network that spans both mobile websites and smartphone applications.

Google, the online search leader, announced a $750 million (£485 million) deal in November to buy AdMob, which controls about one-third of the market for putting ads on mobile applications and web pages.

FTC staff have been canvassing app developers to try to line up support to fight the deal, said one developer, who asked to remain unidentified because he had been interviewed by FTC attorneys.

"It's been really interesting talking to them because they are so dead set against this," said the developer. "They have been clearly positioning to try to stop this."

Google, which generated 97 per cent of its $23.7 billion (£15.3 billion) in 2009 revenue from advertising, has faced growing antitrust scrutiny.

The company walked away from a search deal with Yahoo in 2008 when the Justice Department said it would challenge the tie-up. And Schmidt was forced to step down from Apple's board last year after his dual roles came under FTC review.

The US Department of Justice has been sharply critical of Google's settlement with book publishers and authors' groups that would allow the search giant to create an online digital library.