Google viewed this ad startup as a threat, acquired it to stay on top

In 2011, Google made a strategic move that’s now drawing attention in an ongoing antitrust trial. The U.S. Department of Justice (DOJ) claims the tech giant has engaged in killer acquisitions, where it systematically bought smaller companies to eliminate competition and solidify its market position. The DOJ argues that Google’s tactics were designed to stifle innovation and prevent rivals from gaining ground in the online advertising world.

One of these acquisitions was AdMeld, a company specialising in yield management tools that helped websites optimise their ad pricing using data. Google saw this technology as a potential threat to its advertising business and bought the startup for over $400 million. AdMeld’s technology was eventually integrated into Google’s advertising exchange, though Google shut down the product two years later, reports Bloomberg.

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

According to internal documents shared in court, Google executives initially dismissed yield management tools, calling them “irrelevant.” However, they later realised that companies like AdMeld were preventing Google from accessing more ad inventory on its platform. This led to a shift in strategy, with Google deciding to buy AdMeld to “close the gap” in its offerings.

In court, YouTube CEO Neal Mohan, who was a leader in Google’s display ad division at the time, explained that AdMeld’s technology filled a gap in Google’s ad offerings. “We needed to close that gap as quickly as possible,” he said. However, an email from 2010 showed that Mohan had earlier referred to the “yield manager threat” and suggested that Google should buy one of the leading products by “picking up the one with the most traction and parking it somewhere.”

Also read: Ex-Google executive said that search giant was trying to crush rival advertising networks

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

Google ultimately paid about $100 million more than AdMeld’s estimated value to secure its lead.

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Ayushi Jain

Tech news writer by day, BGMI player by night. Combining my passion for tech and gaming to bring you the latest in both worlds. View Full Profile