The Federal Trade Commission on Friday unanimously cleared Google's $750 million acquisition of mobile ad network AdMob. Calling the decision "a difficult one," the FTC said it was closing the investigation because of recent developments in the wireless marketplace -- especially Apple's $275 million acquisition of Quattro Wireless last December, followed by its introduction of iAd. While the commission said in its closing letter that the deal required "close scrutiny," the FTC ultimately found that Apple's entry into the market offers "reason to believe that Apple quickly will become a strong mobile advertising network competitor." The letter states: "AdMob's success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob's competitive significance going forward, whether AdMob is owned by Google or not." AdMob said in a statement that it is "extremely pleased" with the FTC's position. "Our focus is now on working with the team at Google to quickly close the deal," the company said. Google and AdMob combined would have an industry-leading 21% share of the mobile ad market, with Millennial Media the next-closest rival at 12%, according to an estimate by market research firm IDC. Prior to its acquisition by Apple, Quattro Wireless had an 8% share. eMarketer estimates that mobile ad spending will amount to $593 million this year, and will balloon to $1.56 billion by 2013. The advocacy groups Center for Digital Democracy and Consumer Watchdog had opposed the deal on privacy grounds, arguing that it would leave Google with the ability to create "super data profiles" by combining information about users' search activity with AdMob's data about mobile users. A bipartisan group of five Congress members also questioned whether the deal would compromise consumers' privacy. "Given the vast amount of data on consumers' behavior and preferences that the combined company would control, has the commission assured itself that the deal, if approved, would have sufficient safeguards to protect consumers' privacy?" they asked FTC Chair Jon Leibowitz last month. Jeff Chester, executive director of the Center for Digital Democracy, said Friday that his organization "will continue to press the commission to ensure mobile privacy is protected, especially in a field dominated by Google and Apple." Reaction from AdMob rivals to the FTC decision echoed their response when Google first announced the acquisition back in November. They viewed the $750 million deal as a sign that mobile had arrived as an ad medium. "Google's acquisition of AdMob is a great validation of the mobile advertising space, specifically the focus on in-application, which is the dominant reason for the acquisition," said Michael Chang, CEO of mobile ad network Greystripe. Greystripe and other AdMob and Google competitors had been sent letters by the FTC asking them to testify in sworn statements about the potential impact of the merger. Whatever qualms they may have expressed in those statements, executives at other ad networks publicly hailed the FTC approving the deal as an endorsement of healthy competition in the mobile ad market. The FTC and the Justice Department, however, are now reportedly eyeing a possible antitrust investigation into new rules that Apple imposed on application developers that block them from using non-Apple approved tools like Adobe's Flash.
Seeking to bolster their mobile offerings, Yahoo and Nokia have formed a strategic partnership in which the companies will collaborate on key services such as email, instant messaging and maps and navigation. Under the alliance announced Monday, Yahoo will exclusively power email and chat in Nokia's Ovi suite of Internet services, while Nokia in return will integrate its Ovi maps application into Yahoo properties. The companies also plan to work on efforts to allow Nokia's Ovi users to use their Ovi account IDs to access Yahoo services more widely. Co-branded mobile and PC-based offerings are expected to roll out by the second half of 2010 before becoming available worldwide in 2011. In a press conference held at the Nasdaq headquarters in New York, Yahoo CEO Carol Bartz and Nokia President and CEO Olli-Pekka Kallasvuo emphasized that the companies would mutually benefit by combining their relative strengths in mail and messaging on one side and maps on the other. Bartz acknowledged that the company had not been very focused on its mapping technology. "This alliance changes that," she said. "By using Nokia's maps and Navteq service we will provide a much richer experience for our users." Nokia added digital maps to its phones through the 2007 acquisition of Navteq Corp., the largest creator of maps used in car-navigation equipment, for $8.1 billion. Bartz also underscored the importance of pairing with Nokia, the world's largest cell phone maker, in Yahoo expanding more aggressively into emerging markets including countries such as India and Thailand. "Nokia has by far the strongest track record in this market,' she said, noting the number of cell users worldwide is expected to reach 5 billion this year. For its part, Nokia is counting on Yahoo's popular email and messaging applications to further boost the appeal of its phones, especially in North America, where the Finnish mobile giant still has only a small footprint. "We are clearly the leader in the industry but we do not lead in the biggest market in the world, the U.S.," said Kallasvuo. "This is one step to change that." But William Ho, vice president for consumer services at technology research firm Current Analysis, said it will take more than teaming with Yahoo for Nokia to crack the U.S. market. "The impact on the North American market remains to be seen as Nokia needs to fully invest into this market rather than paying lip service in the past," he said. "This means getting a lot more traction with North American-centric devices rather than repurposing European models." Because most of its devices use the GSM wireless standard that's most common worldwide, Nokia has gotten little distribution through CDMA-based networks like those of Verizon Wireless, Sprint, MetroPCS and others. Nokia has also fallen short in the hot smartphone market as manufacturers and other competitors such as Apple, BlackBerry-maker Research In Motion, Google and HTC gain market share with popular high-end devices like the iPhone and the Droid. But Ho noted that the pact could help both Nokia and Yahoo gain new users in emerging markets, where the mobile phone is often the primary Internet access device. "The deal allows Yahoo to get a different maps product with navigation to potentially get into the mobile realm to counter Google Maps, which has navigation built into a lot of the new Android handsets," he said. The agreement may not do much to break Google's dominance in mobile search, however. Despite forging some 100 partnerships with handset makers and wireless operators globally, Yahoo has not been able to keep Google from claiming roughly the equivalent two-thirds share of searches on mobile devices as on the desktop Web. In an analysis of the Yahoo-Nokia alliance, research firm IDC suggested the companies should move quickly to expand the relationship beyond a handful of core services like email, messaging and mapping. "If the alliance stops at these it will make little difference to either company over the medium to longer-run," stated the IDC report. That's especially true if the companies want to encourage the developer community to build on their mobile services by creating new applications around them, helping in turn to expand the user base. To that end, the firm envisions Yahoo and Nokia partnering on mobile offerings encompassing advertising, search, music and video, mobile commerce and operating system development. "For two companies that share similar global perspectives, and face the common threat of Apple and Google, this alliance can be viewed as a test run for a deeper and broader alliance whose logical conclusion is potentially a merger," according to IDC.
Ad verification systems, local and in-game advertising, and digital-out-of-home advertising are among the hot growth areas for 2010, according to the annual outlook report from Razorfish released today. More broadly, the digital agency predicts that mobile and social media marketing will become key parts of clients' media budgets, if not necessarily reflected in large dollar outlays. "Although we still examined how our clients spent their media dollars with the major players, we also wanted to give weight to the digital advertising long-tail," said Jeremy Lockhorn, who leads Razorfish's emerging media practice. Despite the Great Recession, the firm said clients have continued to experiment with new media in 2009 and Razorfish expects that activity to increase with a rebounding economy this year. Overall, the average client media spend with Razorfish went up 4% last year, compared to a 13% drop in 2008. Analysts are now projecting double-digit ad spending growth this year after a solid first-quarter total of $5.9 billion, according to data from the IAB and PricewaterhouseCoopers. Higher spending doesn't mean marketers will be any less vigilant this year about making sure their ads are appearing where they're supposed to. That's why Razorfish expects ad verification systems -- tools that confirm ads are running where they should be on traditionally opaque network buys, and started showing up last year -- will gain more ground in 2010. The firm said 20% of its clients are interested in learning more about test verification systems this year. "Because of the increase in the use of ad exchanges and networks, advertisers want to make sure they're in brand-safe places," said Lockhorn. Razorfish also expects clients to shift more of their budget to local online advertising with the continuing decline of print newspapers and the rise of devices like the iPad and location-based mobile apps like Foursquare. (One-third of clients ask the firm to run local ads currently.) But Razorfish noted that spending on local display has been twice that of local search, possibly because of more inventory being available in display. In-game advertising, whether in immersive or casual games or social apps like FarmVille, is also tabbed for accelerated growth this year. Because of the segment's "high-impact" visuals and engagement levels, Razorfish expects more investment by non-endemic brands in the space. When it comes to social media, Lockhorn said he anticipates Twitter to make more strides in monetizing the microblogging service. With the company providing account verification for brands and introducing its "Promoted Tweets" ad program last month, he said the company has taken smart initial steps to incorporate advertising and marketing into its platform. But Lockhorn also emphasized that wider use of Twitter and other social media won't necessarily translate into big increases in third-party ad dollars. The category still only accounts for 4% of client media spend at Razorfish. That's because much of the investment is going to earned media -- things like Facebook pages, applications, digital coupons and other promotions that don't include purchasing ad space. That goes the same for efforts in the mobile space, which garnered an even smaller percentage of ad spend. "This just means pure media spend isn't reflective of all the dollars going into social media or mobile," said Lockhorn. Ads in those segments can also be bought more cheaply than some other digital and traditional media categories. One format that combines both offline and digital advertising -- the burgeoning digital out-of-home channel -- is also projected to continue growing, especially among retailers trying to connect with shoppers. But Razorfish points out that there's still a gap in measurement. "The impact of these initiatives isn't yet quantifiable to the level which digital marketers have become accustomed," its report stated.
Google got the green light Friday from the Federal Trade Commission to close on the acquisition of AdMob, the mobile ad display company. The U.S. Federal Trade Commission voted 5-0 in favor of closing the investigation into the deal. The concerns of Google were overshadowed by Apple's launch of its mobile ad platform, as well as the development of ad networks by third-party companies. The $750 million AdMob deal announced in November 2009 had a multimillion-dollar kill clause that Google Chief Executive Officer Eric Schmidt told investors last week the company would never have to use. "Although we do not think this deal will have a significant near-term financial impact, we believe it helps solidify Google's position in the mobile space," wrote J.P. Morgan analyst Imran Khan. "The acquisition of AdMob will allow Google to further monetize its support of the development and use of mobile internet content. We think AdMob will provide Google with the technology to create, serve and analyze emerging mobile ad formats." AdMob clients include Ford Motors, Coca-Cola, Electronic Arts, Procter & Gamble, MTV Europe, Adidas AG and Paramount Pictures, among others, according to Khan. He believes the mobile ad company has managed to stay onestep ahead of its competitors through its acquisition of AdWhirl, which acts as a mobile ad exchange and allows mobile developers to use AdMob or competing mobile ad networks such as Quattro, VideoEgg or Mobclix.
In its annual report on U.S. wireless industry competition, the Federal Communications Commission departed from recent practice by not offering an opinion on whether there is "effective competition" in the sector. The FCC said it chose to focus on providing a detailed analysis of market conditions in the mobile wireless ecosystem rather than reaching any overarching industry-wide conclusion about competition because of the sector's growing complexity. While voting to approve the report, however, the FCC's two Republican commissioners, Robert McDowell and Meredith Attwell-Baker, issued statements objecting to the agency's neutral stance and expressing support for finding the industry competitive. The 300-page report adopted by the FCC found increasing concentration in the wireless market, with consolidation among carriers increasing 32% since 2003 and 6.5% since 2008, according to one widely used measure. Last August, the FCC opened a broad-based probe of the wireless industry covering competition, innovation, and user access to accurate information. But with the 14th version of the wireless competition report mandated by Congress, FCC Chairman Julius Genachowski said that the commission was not trying to "reach an overly simplistic 'yes-or-no' conclusion" about the industry's level of competition. Instead, it complies with its mandate "to assess market conditions by providing data on trends in competition and choice over time," he wrote in a statement accompanying the report. Genachowski also noted that the FCC's analysis this year went beyond traditional like voice service, spectrum holdings and the number of subscribers to cover a wider range of newer topics such as the deployment of 4G networks and the "explosion" of smartphones. Among its key findings, the FCC found that the four major U.S. carriers launched 67 new smartphones between 2008 and 2009 across platforms including the iPhone and BlackBerry, Palm and Windows Mobile-based devices. The proliferation of high-devices has also significantly increased mobile data traffic, with revenue from newer data services supplanting those from traditional voice service. To help meet growing demand, the national broadband plan introduced by the FCC in March included recommendations for speeding up and expanding mobile broadband deployment including encouraging TV broadcasters to give back spectrum that could be used for wireless computing. The broadband plan also proposed new rules to help ensure competition in fixed and mobile broadband services as well as rules requiring increased transparency in performance. In terms of investment, the new report on wireless competition said providers continued to spend significant amounts on network upgrades despite the economic downturn. But because industry revenue has continued to grow, capital investment has declined as a portion of industry revenue from 2005 to 2008, from 20% to 14%. Verizon Wireless, AT&T, Sprint Nextel and T-Mobile USA have all undertaken efforts to roll out 4G networks. When it comes to competition among carriers, the FCC said wireless service has become more concentrated over the last five years, with AT&T and Verizon Wireless together accounting for 60% of revenue and subscribers, and continuing to gain share. The two next largest providers, T-Mobile and Sprint, had a combined 1.7 million net loss in subscribers during 2008 and added 827,000 subscribers last year. The FCC reported that 95.8% of the population is served by at least three mobile voice providers, and 99.6% by one or more. Coverage for mobile broadband was lower, with 76.1% served by at least three providers, and 98.1% by one or more. Despite endorsing the report, the two Republican commissioners -- Robert McDowell and Meredith Attwell-Baker -- took issue with the neutral position adopted by the FCC in assessing wireless competition. McDowell pointed out that 74% of American consumers have access to five or more mobile wireless service providers, up nine percentage points from the last wireless competition report. "If nothing else, the report shows that the wireless sector is dynamic, ever-improving and responsive to consumer demand," he wrote. But he expressed concern that the report instead could lay the foundation for further regulation. Likewise, Baker said the data presented should have led the FCC to conclude there was "effective competition" in the industry. But Michael Copps, one of the three Democrats among the commissioners including Genachowski, said some of the findings were "downright sobering -- and worrying, too." In particular, he voiced concern about competition being seriously endangered by "continuing consolidation and concentration in our wireless markets."
The mobile TV nut is still far from being cracked. I have been sticking with this dream from the beginning and watching the growing pains. Curiously, the basic technical achievement of streaming live or on-demand TV shows to my handset still packs an initial WOW factor. TV itself continues to have that kind of special magic in our culture. I recall the first time I saw MobiTV running on a Windows Mobile smartphone over a 2.5G network at an exhibit more than five years ago. Whoa! That was cool. A live TV grid on my phone. But did I really want to drop into a live broadcast? The inherent problem with mobile TV was context of use. If you only had a few minutes to drop into a telecast, you never knew if the information you wanted was showing at the time or if you were falling into one of those deadly long forced cable TV ad pods. Mobile TV, Sprint TV and others tried to answer that problem with mobile-ready pods of shorter programming in addition to the live feeds. Some of these programs were on tighter 10- and 20-minute cycles. When VCast premiered along with Verizon's 3G network more than four years ago, it tried to use a full on-demand approach, arguing at the time that people really wanted video in small, targeted pouches, not live streams. Again the technology was impressive, but the networks and handsets still were not up to the tasks. In both cases, the early MobiTV and VCast experiences were sluggish and haphazard enough to make a user think twice and thrice before powering them up. It was very easy to forget they were there. When Qualcomm finally rolled out FLO tv over its own broadcast channel in subsequent years, it represented an improvement in video quality, if not reception. Ironically, early mobile TV is a technological throwback to over-air TV of the pre-cable era. Back in the day, getting strong reception from rabbit ears and rooftop antenna positioning was a manly art. I still have to walk to windows or wave the damned handset around to get proper video streams or FLO tv signals. Maybe I should wrap the phone in aluminum foil. (That was an inside joke for anyone over 45.) But even as signal issues improve, the basic puzzle for mobile television remains the interface. Almost all of these services exact an extra fee, and in order to show value the providers are compelled to add ever more content. MobiTV launched its iPhone app last month. The basic download is free and comes with live news updates from ABCNews Now and select on-demand content from NBC News, MTV, Comedy Central. You need to subscribe to the premium service, which unlocks a trove of brands, including eight live channels like MSNBC and Fox, and 30 channels of on-demand material. But this is going to cost you $9.99 a month, $24.99 for a quarterly sub, or $44.99 for six months. Clearly the emphasis is with piling on the sense of value, and generally a dedicated TV lover shouldn't feel cheated. The technology over 3G is surprisingly good, although we still suffer pauses and buffers even in loosely populated areas. We are still waiting to warm up the telly a bit as we move from station to station, but you can pretty quickly drop into a live stream from one of the cable news networks easily. A number of the other live channels are made up of short-form comedy, cartoon and music video content. You can get a satisfying munch of drive-by content here. On a technical basis, mobile TV keeps getting better and more fluid, closer to that instant-on TV experience. What hasn't been solved is the clutter. As services like MobiTV pour in the content choices, it just gets harder to navigate. As much as the interface tries to distinguish on-demand from live programming, the number of media brand icons piling up at once makes the distinction difficult for the user. Finding one's way back to the video screen actually can be confusing. I was running Letterman's monologue on-demand in background while scrolling through the menus of other offerings and honestly couldn't find a clear path back to the video I could still hear in background. Keeping the streaming video visible in a corner during menu navigation might be an answer to this. Overall, mobi TV has done a serviceable job with what continues to be an unenviable assignment - squeeze last century's signature media experience into this century's wholly different consumption patterns, interactivity and personalization. But the main problem here, as with all mobile video I have seen, is discoverability. I can get to last night's CBS News if I want, but it will take some drilling. The dating of the show segments is not clear, and the availability of last night's material from the individual providers is catch-as-catch-can. My guess is that a lot of mobile TV viewing will echo online video viewing, in that we will use the device to play catch-up on missed programming. And I want to do that every morning. So make it easier for me to exercise the ritual by not making me redrill every morning across three of four programs. Now, mobi TV tries to mitigate the pain with filters for on-demand content, and this helps. But the broad-based mobile video providers like VCast, Sprint TV and mobi TV have successfully corralled a boatload of content without necessarily streamlining the experience enough for the loads they have to carry. What we need in all mobile video is true personalization and more push alerts to drive regular use. I need to be able to designate Dave, Jon, and Rocky & Bullwinkle as the content I want floating to the top at all times. Also still missing from the equation is proper surfacing. It is very easy for a TV service to get lost in a sea of app icons, many of which deliver information more efficiently than warming up the old mobile TV and running the dial to find what you want. Put a widget on my home page that surfaces last night's TV content I want to review, and you may earn $10 a month. The conundrum for some of these video providers is that high levels of personalization undercut promotion. If I can carve direct routes to the shows I want when I want them, then a mobile TV platform loses some of its ability to cross-promote. Since more than a quarter of network TV advertising space is still reserved for house ads of the network's own programming, this is an essential part of the TV model that clashes with the personalization models mobile video demands. When it comes to mobile TV we are getting somewhere, but I still can't say where exactly it is we're headed in order to make a classically mass, lean-back medium fit this intimate, portable, lean-over platform.