Grapevine

US says Google saw ad startup as a 'threat'—and bought it

Google bought advertising technology provider AdMeld in 2011 because the search giant saw the startup as a "threat" to its online display ad strategy, antitrust enforcers sought to show at trial Monday.

The purchase of the company was portrayed by the Justice Department in its monopolization trial against the Alphabet Inc. unit as an example of so-called killer acquisitions. The government alleges that Google bought up nascent rivals, starting with DoubleClick in 2008 and followed by AdMeld and Invite Media, to build up a dominant position and stifle competition for its online ad tools.

After purchasing DoubleClick, maker of the web's leading ad server, Google employees debated whether to buy a company that made "yield management tools," which help websites analyze data for ad pricing. Leading yield management companies at the time included AdMeld, PubMatic Inc. and the Rubicon Project.

In an internal presentation shown in court Monday, Google staff dismissed the technology as "irrelevant," but said the tools were getting in the way of the search giant's opportunities to include more website ad inventory on its ad exchange platform.

Google purchased AdMeld for more than $400 million and, after integrating its technology into the company's advertising exchange, shut down the product two years later.