June 10, 2010

Google Expresses Concern Over Apple’s iAd Service

On Wednesday, Google lashed out against Apple's new iAd service launching with the iPhone 4, saying it would effectively prevent the Internet search giant from placing ads inside iPhone applications.

Omar Hamoui, founder of AdMob, a mobile advertising startup, said Apple's new terms of service for application developers would bar the use of AdMob or Google advertising solutions on the hot-selling smartphones.

Google has been vying for a position with Apple in its nascent mobile advertising space, which is expected to see strong growth over the next few years.  Google currently dominates Web advertising.

Apple chief executive Steve Jobs said Monday during the company's keynote speech at the WWDC conference that Apple's iPhone is the leading platform for mini-programs known as applications.  He said that over 225,000 applications, or "apps," are available in Apple's App Store.

Apple is launching its own advertising program called iAd, which allows software developers or ad agencies to embed ads directly into applications being offered for the iPhone, the iPod Touch and now the iPad. 

Apple will sell and host the ads and give developers 60 percent of the revenue while keeping the remaining 40 percent.

AdMob's Hamoui said in a blog post that Apple's new terms of service "if enforced as written, would prohibit app developers from using AdMob and Google's advertising solutions on the iPhone."

Apple's new terms would appear to prohibit Google from collecting user location data from applications running the iPhone.

Location data is considered extremely important for mobile advertising because it allows them to deliver ads relevant to the area of its users.

Apple's terms state that only an "independent advertising service providers whose primary business is serving mobile ads" can collect such data.

They say, "An advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple would not qualify as independent."

Google and Microsoft are both developers of mobile phone operating systems and Google also sells its own smartphone, the Nexus One, so the terms would appear to impact AdMob.

"These advertising related terms both target companies with competitive mobile technologies (such as Google), as well as any company whose primary business is not serving mobile ads," AdMob's Hamoui told AFP news.

"This change is not in the best interests of users or developers," he said. "Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress.

"We'll be speaking to Apple to express our concerns about the impact of these terms," Hamoui said.

The U.S. Federal Trade Commission gave the green light to Google's $750 million purchase of AdMob just last month, dismissing anti-trust concerns.  Part of this approval was because of the existence of Apple's competing mobile ad network.

Apple said Monday that iAd will debut on the iPhone and iPod Touch on July 1 and that it has already attracted iAd commitments worth over $60 million for 2010 from AT&T, Nissan, Disney and other companies.


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