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Google's AdMeld acquisition gets new DOJ scrutiny

The Justice Department has submitted a second request for information on Google's attempt to acquire Admeld, which optimizes online display ads.

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Antitrust authorities at the U.S. Justice Department have submitted a second request for information on Google's plan to acquire Internet advertising company Admeld, the companies said yesterday.

The move means a new round of scrutiny, and thus more waiting, for the Admeld acquisition, reported to be for about $400 million when it was announced in June.

Google's biggest ad business is for search ads that appear next to search results, but it's been trying to expand in the domain of more traditional display ads--the graphics such as banner ads that often tout big brand names. Admeld offers services for "yield optimization"--helping publishers to get the best ads they can.

Neal Mohan, vice president of display advertising at Google, painted the DOJ request as routine in a blog post:

We've been discussing this deal with the Department of Justice, who are obliged to review the transaction because of its purchase price. As they do for many acquisitions, they have sent us a "second request," which means that they are asking for more information in order to complete their review of this particular acquisition. This doesn't surprise us, as today's display advertising industry is very new and highly complex.

Routine it may be, but it indicates the companies have more convincing to do. Mohan also took the trouble to show how Google believes the acquisition wouldn't harm competition, pointing out new developments in the area and how easy it is for publishers to switch services to another company.

Admeld Chief Executive Officer Michael Barrett didn't sound pleased about the DOJ second request. In a blog post, he said:

Though we're disappointed by this decision because it will delay our efforts to bring even more innovative services to our clients and partners, we recognize it takes time to analyze any industry as competitive and dynamic as this.

Google's early years were characterized by an extremely strong focus on search and then search advertising. But as the company has grown dominant in search, it has expanded into many other online areas--e-mail, video, books, display advertising, photo sharing, word processing, browsers, and social networking. Along with this has come increased antitrust scrutiny for Google.

Display advertising is a particularly interesting area. Google's first big tangle with antitrust matters was for its 2007 acquisition of display ad firm DoubleClick for $3.1 billion. That was in an era when online display-ad leader Yahoo was in a much stronger position.

Mobile advertising is a hot area now. In this area, Google acquired AdMob for $750 million in 2010.