U.S. antitrust regulators gave Google Inc approval to buy mobile advertising rival AdMob, after months of delay and rumor that Google was headed for a court fight with government officials over the $750 million transaction.

The Federal Trade Commission said in a statement on that it was concerned that two top mobile advertising networks were combining, but said Apple Inc's entry into the market would mitigate the effects of the Google/AdMob powerhouse.

The decision was a difficult one because the parties (Google and AdMob) currently are the two leading mobile advertising networks, and the commission was concerned about the loss of head-to-head competition between them, the FTC said in a statement.

Apple's new platform for the iPhone and iPad -- dubbed iAd -- marked Apple's first move into a small but growing market and comes shortly after its purchase of Quattro Wireless, an advertising network that spans both mobile websites and smartphone applications.

During the FTC's review of the merger, Apple acquired the third largest mobile ad network, Quattro Wireless. The commission said on Friday it believed Apple would quickly become a strong mobile advertising network competitor.

Though we have determined not to take action today, the commission will continue to monitor the mobile marketplace to ensure a competitive environment and to protect the interests of consumers, the FTC said.

Google had said in November that it would buy AdMob for $750 million in stock. The world's No. 1 Internet search engine called the approval great news and said the deal would close in coming weeks.

AdMob founder and Chief Executive Omar Hamoui said he was pleased with the decision and would work with Google to close the deal.

Shares of Google fell 0.7 percent to $471.70 in late-afternoon trade on Nasdaq.

SIGNS OF A FRUSTRATED CHALLENGE?

The mobile ad market was evolving and growing so fast that challenging a deal in the space would be very difficult, said David Balto, a former FTC policy director.

Apple's moves over the last couple of months hurt the FTC's case, he added, referring to the iAd launch and requirement that app developers work within certain specifications.

In the leadup to Friday's decision, there had been signs that the FTC wanted to challenge the acquisition.

FTC staff had apparently believed that app developers, whose wares for mobile devices are often supported or subsidized by advertising, might end up with fewer choices of firms to sell their advertising space.

But few app developers seemed to share the FTC's concern.

One told Reuters in April that the FTC staff appeared dead set against approving the deal, and went on to say that he was puzzled by the FTC's concern.

This sort of commentary -- and that of others who went online to describe similar interaction with the commission -- made the FTC's job even harder as it faced the prospect of explaining its case to a judge, said Jeff Shinder, an antitrust lawyer with Constantine Cannon.

Someone's got to get hurt here. You want to show consumers coming in, saying 'I'm worried,' said Shinder. And (it hurts) when one of these constituencies is openly disdainful of the agency's action.

Google, which generated 97 percent of its $23.7 billion in 2009 revenue from advertising, has faced growing antitrust scrutiny as it seeks to use revenue from its dominance of the search market to move powerfully into other markets.

The company walked away from a search deal with Yahoo Inc in 2008 when the Justice Department said it would challenge the tie-up. And Google Chief Executive Eric Schmidt was forced to step down from Apple's board last year after his dual roles came under FTC review.

The U.S. Department of Justice has been sharply critical of Google's settlement with book publishers and authors' groups that would allow the search giant to create an online digital library. That class action settlement is awaiting approval by a court in New York.

(Reporting by Diane Bartz; Editing by Tim Dobbyn and Richard Chang)

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