The U.S. Department of Justice will reportedly evaluate the antitrust implications of Google’s proposed acquisition of Admeld, whose technology is designed to help web publishers manage and fine-tune the way they sell display ads.
The DOJ wants to review whether competition in the online advertising market will be hurt if Google buys Admeld, a deal the search company announced just several days ago, Bloomberg and The Wall Street Journal are reporting.
Neither Google nor the DOJ immediately responded to requests for comment.
Google, the long-time leader in search advertising, has over the past two years made big strides in display advertising, a market segment in which for many years it was a minor player.
By investing billions of dollars through major acquisitions of companies like YouTube and DoubleClick, Google has now significantly improved its position in display advertising.
In fact, IDC recently reported that in the first quarter Google knocked off Yahoo from its top spot as display advertising leader in the U.S. Yahoo has traditionally been the leader in display advertising.
In the first quarter, Google’s share of the U.S. display ad market rose to 14.7 percent from 13.3 percent in 2010’s fourth quarter, while Yahoo’s share shrunk to 12.3 percent from 13.6 percent, IDC said.
Thus, it’s not surprising that the U.S. government is scrutinizing Google acquisitions of online ad companies, especially of one like Admeld that is focused on display advertising, the area to which Google is extending its market dominance.
In the search advertising segment, Google had an almost 60 percent share of revenue in the first quarter, followed by Microsoft with almost 8 percent and Yahoo with 7 percent, IDC said. Search advertising is the most popular online ad format, attracting close to half of all spending, while display is the second most popular, but the fastest growing, according to IDC.
Simultaneously, the U.S. Federal Trade Commission is also probing Google’s dominant position in search advertising, Bloomberg reported.