• by Laurie Sullivan  @lauriesullivan, December 2, 2011

Google received approval from the U.S. Department of Justice Friday to close the $400 million acquisition for AdMeld, which helps publishers sell display ad inventory at the best price. The deal also strengthens Google's position to move beyond search and focus on display advertising through strong publisher relationships and what is now known as private ad exchanges.

AdMeld will support Google's display ad network and the DoubleClick ad exchange, but also will work with other ad exchanges operated by Microsoft and Yahoo.

Google bought publisher relationships and expertise in supporting them, according to Jerry Neumann, an early-stage investor in technology companies at Neu Venture Capital. He said Google's publisher side team typically focuses on volume business, but AdMeld spends more time working closely with publishers.

That closeness could quiet rumblings heard from publishers suggesting that private exchanges are not working as well, as many had hoped. Neumann said to expect continued consolidation in 2012.

When the dust settles, the industry might see two or three dominant players in the space, according to Adrian Tompsett, vice president, business development at DataXu.

With the deal now cleared by the Department of Justice, Google will acquire a large number of premium publisher relationships and inventory. "I expect more sell-side consolidation," Tompsett said. "There are folks still in the market, such as Rubicon, Pubmatic and others. Some will be acquired or merge in 2012."

Joe Apprendi, CEO at Collective, agrees that the deal was likely about market share and less about technology. Since the original announcement, the sell-side (SSP) market has changed dramatically with ad servers, ad exchanges, yield optimizers and DMPs quickly morphing from point solution providers to adding more capabilities.

"Google likely had great visibility into Admeld's operation, given the amount of real-time bidding ad spend flowing through Invite Media, so my hunch is Admeld's publisher base was very complementary to those publishers using Google AdX," Apprendi said.

Krishna Subramanian, CMO at Velti, which acquired Mobclix, a mobile supply-side platform he cofounded, said the deal will push neutrality and third-party data into the forefront. "The question is how Google, which sits on a wealth of data, will support AdMeld," he said.

For now, AdMeld technology and products will remain separate from Google's in the short term, but talks will soon begin to integrate technologies and simplify processes. Online advertising should become seamless for publishers and brands.

AdMeld CEO Michael Barrett turned down press requests, but explained in a blog post that it's highly problematic for publishers, which must grapple with complexity when it comes to managing ad inventory. "Helping publishers overcome this challenge is what gets us up in the morning, and we're excited to be working with Google to do it," he wrote.

Google confirmed in June its intention to acquire AdMeld through a blog post from Neal Mohan, vice president, display advertising. He wrote that combining AdMeld's services, expertise and technology with Google's offerings would create flexible ad management tools for large publishers.