The Federal Trade Commission is currently investigating Google’s $750 million purchase of mobile ad network AdMob. Rumor has it that the group is planning to block the deal. That would make a lot of people happy — including Google’s competitors. But it’s starting to look like the anti-trust investigation is not focused on Google’s dominace in the mobile ad space. Rather, it seems that Google’s success in search precedes its entrance into other markets.
With one Google foe in particular, the nonprofit Consumer Watchdog, it looks like an ax to grind in one area can just as easily be deployed to block the company’s ambitions elsewhere.
This weekend, The Washington Post profiled John Simpson, “a 62-year-old veteran journalist with a deep suspicion of big business and a mission to break up the search giant.” After getting laid off twice in two years, Simpson moved into the non-profit world:
“Now Simpson works for a nonprofit group called Consumer Watchdog, where
his singular focus is turning up the regulatory heat on Google. With
its brand appeal, he says, Google is an ideal target.”
The experience of being downsized in the media world did not sit well with Simpson, who seems to be seeking retribution:
“You become convinced something is wrong with corporate America if
someone who has loyally worked for 30 years can be thrown out on his
What that has to do with Google entering the mobile space remains unclear. The search giant has dealt with media people misunderstanding its business model before, but now that Google has gotten so large in the search business, many groups are worried that the company will repeat the trick in other areas. A telling part of this story is that Consumer Watchdog is working with Google’s competitors:
“True to Washington’s playbook, [Simpson’s] found unexpected allies. That meant
making friends with likely opponents: corporate giants such as
Of course companies like Micorosoft, Yahoo and AOL want to block Google’s mobile acquisition. If they cap off a powerful competitor’s growth, it makes it that much easier for them to get a toe hold with their business interests. But there is a key element missing from this story. Nowhere does Simpson come clean with proof of Google’s malfeasance. He only comes close here:
“I’m a hell-raiser. That was what I was hired to be. The more I looked, the more I saw that this company was abusing its
market power to dominate book search and now the mobile marketplace.”
It might be nice to pick a company to blame for your woes or the way that digital businesses are changing right now. But there is a difference between dominating a marketplace and preventing other companies from competing within it.
Unfortunately, right now it is looking like Google’s dominance in search is being used to prove that it will dominate the mobile market as well. The real problem is that groups like Consumer Watchdog may be partnering with Google’s competitors to take it down, only to find that another company can just as easily spring up in Google’s place. Despite its rapid diversification in recent years, Google has not seen runaway success in any area other than search.
As I’ve written before, without the counter of Google and AdMob, the competition in the mobile space could be even less. And the FTC, for all of its interest in reigning in Google, could pave the way for Apple and Quattro wireless to truly dominate mobile advertising.