Google saw this ad startup as a threat and acquired it to stay on top

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Some time ago, Google made a strategic move that is now attracting attention in an ongoing antitrust trial.

In 2011, Google acquired AdMeld, a company that specialized in revenue management tools that helped websites analyze data for advertising pricing.

Google saw the technology as a potential threat to its advertising business and bought the startup for over $400 million.

In 2011, Google made a strategic move that is currently attracting attention in an ongoing antitrust trial. The U.S. Department of Justice (DOJ) alleges that the tech giant made a series of killer acquisitions in which it systematically bought smaller companies to eliminate competition and strengthen its market position. The DOJ alleges that Google’s tactics were designed to stifle innovation and prevent rivals from gaining a foothold in the world of online advertising.

One such acquisition was AdMeld, a company that specialized in revenue management tools that helped websites optimize ad prices using data. Google saw the technology as a potential threat to its advertising business and bought the startup for more than $400 million. AdMeld’s technology was eventually integrated into Google’s ad exchange, although Google shut down the product two years later, Bloomberg reports.

Also read: Google’s internal discussions on ad fees revealed during antitrust trial, full details

According to internal documents released in court, Google executives initially dismissed performance management tools as “non-essential.” However, they later realized that companies like AdMeld were preventing Google from getting more ads on its platform. That led to a change in strategy, and Google decided to buy AdMeld to “close the gap” in its offering.

In court, YouTube CEO Neal Mohan, who was then the leader of Google’s display ads business, explained that AdMeld filled a gap in Google’s advertising offering. “We had to close that gap as quickly as possible,” he said. But a 2010 email showed that Mohan had previously cited the “yield manager threat” and suggested that Google should buy a leading product, “taking the one that has the most traction and parking it somewhere.”

Also read: Former Google exec says search giant tried to destroy rival ad networks

Despite the DOJ’s claims, Mohan denied that the acquisition was intended to eliminate competition. “Absolutely not,” he said. Instead, he argued that AdMeld’s tools complemented Google’s ad exchange. But he acknowledged that Google’s acquisitions of DoubleClick and AdMeld were intended to prevent the company from “falling behind” in the ad tech market.

Ultimately, Google paid about $100 million more than AdMeld’s estimated value to secure the lead.

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Ayushi Jain

Tech news reporter by day, BGMI gamer by night. I combine my passion for technology and gaming to bring you the latest from both worlds. See full profile