Is Apple locking Google out of iPhone ad space?

iPhone and iPad apps barred from using ad services affiliated with makers of mobile hardware or software -- except Apple

If you want to develop apps for the iPhone or iPad, your apps can't deliver ads through any service affiliated with a company that makes mobile devices or platforms -- unless that company happens to be Apple.  

That appears to be the gist of new rules devised by Apple for mobile app developers, as reported by All Things Digital. The move could put a dent in mobile ad revenue for Google -- which now owns AdMob -- as well as any other developer of mobile hardware or software that enters the mobile ad-delivery business (for example, Microsoft).

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Developers make money from their free mobile apps by bundling them with ads delivered by one of many providers. The apps communicate with the ad providers, sending along critical data about users, ad views, ad clicks, and the like. That enables the service to target ads more intelligently, measure the progress of ad campaigns, track how much revenue a given developer gets, tailor ad campaigns for advertisers, and so forth. Cut off that exchange of data, and ads lose much of their value.

Under Apple's new rules, a developer's app running on the iPhone or other mobile Apple platform could only share the data it gathers with "an independent advertising service provider whose primary business is serving mobile ads (for example, 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.)"

That's pretty specific, right? Now what ad services out there are affiliated with developers or distributors of mobile devices or mobile operating systems? Two immediately spring to mind: AdMob, now owned by Google (as mentioned above), and iAd, Apple's mobile ad platform. But Apple conveniently excludes itself from the "independent" restriction it puts on other services.

For developers, this means that if you want to build an app that runs on multiple platforms -- including the iPhone -- and use a "non-independent" provider such as AdMob, you'd have to go through an alternative service for the version of the app running on an Apple platform. That's impractical, at best; harsher critics might even call it restrictive.

AdMob is playing up that angle in its criticism of Apple's new rules. Rather than complaining of the hit to AdMob and Google's bottom line, the company is looking to generate sympathy by arguing that the rule is harmful for developers and consumers alike. "The terms hurt both large and small developers by severely limiting their choice of how best to make money. And because advertising funds a huge number of free and low cost apps, these terms are bad for consumers as well," writes AdMob founder Omar Hamou in this AdMob blog.

Apple has been typically mum in clarifying its rules. But it's tough not to interpret the company's actions as anything but a means of giving itself a significant advantage over its Google rival in the lucrative mobile ad space. 

This article, "Is Apple locking Google out of iPhone ad space?," was originally published at Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog.

Copyright © 2010 IDG Communications, Inc.

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