Inside Google

WASHINGTON D.C. – Two advocacy groups asked U.S. antitrust regulators on Monday to block Google’s purchase of AdMob, a provider of advertising services for mobile phones, on antitrust grounds and to address privacy issues raised by the deal.

Consumer Watchdog, a consumer advocacy organization, and the Center for Digital Democracy, an advocate of open access to the Internet, said in a letter to the Federal Trade Commission that the proposed deal would "substantially lessen competition in the increasingly important mobile advertising market."

Google is the world’s No. 1 Internet search engine while the privately held AdMob makes technology for delivering display ads on mobile phones. It also maintains a network that allows advertisers to place display ads on mobile Web sites and directly within specialized smartphone applications.

The groups also said the deal created privacy concerns, which are not normally considered in antitrust analyses of deals.

"Google amasses a gold mine of data by tracking consumers’ behavior as they use its search engine and other online services. Combining this information with information collected by AdMob would give Google a massive amount of consumer data to exploit for its benefit," said the emailed letter, which was addressed to FTC Chairman Jon Leibowitz.

Google has said that the FTC requested additional information about the $750 million deal last week. In the absence of a second request, U.S. antitrust regulators normally approve deals within 30 days.

If approved, Google’s purchase of AdMob would be its third most expensive purchase behind the $3.1 billion acquisition of DoubleClick and the $1.65 billion purchase of YouTube.

Google generates the majority of its revenue, which totaled roughly $22 billion in 2008, from selling ads that appear alongside its Internet search results.

Google could not immediately be reached for comment, and the FTC could not immediately confirm receipt of the letter.

Google has experienced increasing regulatory scrutiny as it has grown. The U.S. Department of Justice in September asked a New York court to reject Google’s settlement with book publishers and authors groups that would allow the company to sell digital copies of some books.

Google is also reportedly in talks to buy Yelp Inc, a popular website for reviews of local businesses, for more than $500 million.

By swallowing privately held Yelp, Google would own one of the Web’s most popular repositories of local restaurant and small-business information, including more than 8 million reviews penned by Yelp’s users.

(Reporting by Diane Bartz; Editing by Steve Orlofsky)