Google’s AdMob Deal Bolstered by Apple’s Move, Schmidt Says

Apple Inc.’s move into mobile advertising shows the market is competitive and U.S. regulators should permit Google Inc. to buy AdMob Inc., Google Chief Executive Eric Schmidt said. Apple CEO Steve Jobs said April 8 that the Cupertino, California-based company will offer iAd, an advertising platform that would compete with AdMob, on a new operating system for its iPhone. The announcement escalated Apple’s rivalry with Google for customers and application developers as demand for smartphones climbs. “It’s evidence of a highly competitive market,” Schmidt told reporters after a speech yesterday to the annual convention of the American Society of News Editors in Washington. He said the $750 million AdMob purchase, proposed in November, “should go through.” U.S. regulators vetting the deal have sought sworn declarations from Google competitors and advertisers, indicating the government may challenge the deal, people with direct knowledge of the matter said last month. The purchase needs approval from the Federal Trade Commission. AdMob sells ads that appear on Web pages and applications on mobile phones. The Federal Trade Commission is assessing whether the purchase would let Mountain View, California-based Google parlay its dominance in Internet searches on computers to phones.

In remarks to the organization led by newspaper editors, Schmidt said mobile devices such as Apple’s iPad and his company’s Android phone will help newspapers better connect with readers.

Responding to Murdoch

“This is the future,” Schmidt said as he held up an iPad, a Kindle from Amazon.com Inc. and an Android phone. “Technology allows you all to talk directly to your users.” News Corp. Chief Executive Officer Rupert Murdoch said on April 7 that newspaper publishers should prevent Internet search engines, such as Google’s and Microsoft Corp.’s Bing, from linking to full news articles for free. “It’s best to look at Rupert’s comments as in the context of a business negotiation, because he’s a very good businessman,” Schmidt said in response to a question from the audience after his speech to the editors. Even newspaper companies that demand payment for viewing their content online cooperate with Google “because we send a lot of traffic to their sites,” Schmidt said. “We want you to have tools and technologies which will allow you to make a lot of money from those users,” Schmidt said “Because ultimately we need more money going into the system.”

Option of Subscribing

News aggregators should be limited to displaying the headline and a couple of sentences of a news story, and give the user the option of subscribing to the originating publication, according to Murdoch, whose New York-based company publishes the Wall Street Journal among newspapers in the U.S., U.K. and Australia.

News Corp.’s international unit said March 26 it will charge for online access to The Times of London and The Sunday Times newspapers starting in June.

News aggregators are led by Google, the most popular Internet search engine, and Yahoo! Inc.

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