The FTC is now considering moving to block the Google-AdMob deal. The post below lays out my logic on why this is an insane position to even consider and further evidence of government run amok.
As I noted in an earlier blog post, free markets are the most efficient and equitable organizing principle for economic activity. Moreover, government monopolies, command and control resource allocation, and top-down/centralized decision making limit our freedom and destroy value in society.
Silicon Valley is perhaps the best example of free markets in this country - groups of individuals, free of any government subsidies, direction, or policy, are able to come together, free of labor laws that limit hiring or firing, and pursue their individual utility. The ideas and the allocation of resources are highly decentralized and the net result is an incredible wealth and productivity machine. No one orders that we invest in search engines, new chemical entities, iPhone apps - and yet the market somehow magically delivers innovation and value year after year.
I believe that it is better for a million people to make one decision than for one person to make a million decisions - the logic of such a premise is undeniable and yet we routinely expect government decision makers to solve complex issues fairly and optimally. Markets move so quickly - think mobile over the last 24 months - that it is insane to think that the government can truly understand the issues and make a sound decision. Think APPL vs Flash, HTML5, iAd, iPad, Android - the market is moving a billion miles an hour and yet government bureaucrats are expected to understand the pace of change, market dynamics, and decide who can buy whom.
The recent news that the FTC is considering blocking Google's acquisition of AdMob is a powerful example of government regulation run amok. Let's consider the premise of the FTC's position - because Google is THE player in paid-search, the government is considering blocking their acquisition of AdMob, a leading player in mobile advertising. This "concern" flies in the face of logic - for one, Apple not Google dominates the mobile Internet, Apple not Google runs a closed system, Apple not Google decides what content can execute on the market leading devices, Apple not Google is working to kill Flash, 3rd party analytics services, non-iAd ad units....
When we consider health care reform, financial industry reform, merger activity - it behooves us to remember that regulators cannot possibly understand - no one can - the complexities at work.
Market competition is the best remedy - think MSFT over the last five years - Apple is kicking their butts....
All of us in Silicon Valley should be ALARMED at the value destroying role government plays when they step into the legislate or litigate in hopes of preserving competition, fairness, or some other impossible to define and measure goal.
We are all the beneficiaries of free markets - let's remember that when we vote and let's all let the government know they should not play God in markets that move at a speed and complexity that no one person, let alone a group of smart people, can fathom, understand, or benignly influence!
