Google to pay AdMob $700M kill fee if acquisition rejected
| Google is reportedly poised to pay AdMob a kill fee valued at $700 million if federal regulators reject the digital services giant's proposed $750 million acquisition of the mobile advertising network. Although rumors of the exorbitant kill fee first surfaced a few weeks back, The Wall Street Journal reports a Google shareholder asked CEO Eric Schmidt to address the buzz during the company's annual stockholders meeting Thursday--Google executives declined to comment specifically about the status of the AdMob deal, but Schmidt said "We don't expect to pay any kill fee because we expect these things to get approved."The Federal Trade Commission is presently investigating the Google/AdMob deal, first announced late last year. This week, The New York Times reported the FTC has received a two-week extension from Google and AdMob to delve further into the acquisition and its potential impact on competition in the mobile ad segment, with a particular emphasis on Apple's forthcoming iAd initiative. Citing two sources briefed on the review process, the NYT reports the FTC is looking further into the competitive repercussions of Apple's January deal to purchase AdMob rival Quattro Wireless, a deal that represents the foundation of the iAd effort--Google execs have cited iAd as proof the mobile advertising landscape will remain competitive should the FTC approve its AdMob buy. A source adds that Apple's notorious reluctance to open up on its business could be complicating the FTC's investigation.Sources indicate that both Google and AdMob anticipate the FTC will reject the merger over antitrust concerns. Earlier this month, The Wall Street Journal noted that the absence of a clear direction of inquiry by FTC investigators does not bode well for the deal, first announced in late 2009. "The federal government is looking for a way to discipline Google in some way, because of larger concerns about its search power on the web," said one Journal source. "And this is where it looks like it will try to show that concern." Said another observer, "The FTC really wants to do this and is in search of a legal theory that it can win with." The FTC's decision could come as soon as later today. |
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