Will iPhone lose YouTube in Apple vs. Google war?

Just how dirty will the war between Apple and Google get? Will Google respond to Apple's iOS iAds lock-out by locking Apple's people out of YouTube?

Once upon a time when they were friends, Apple's Steve Jobs and Google boss Eric Schmidt would share grins and handshakes and secrets. They had a 'special' relationship.

Love in vain

That relationship saw the June 2007 introduction of the YouTube app for the then upcoming first-gen iPhone and for the Apple TV.

"iPhone delivers the best YouTube mobile experience by far," said Jobs at the time. "Now users can enjoy YouTube wherever they are—on their iPhone, on their Mac or on a widescreen TV in their living room with Apple TV."

That was in 2007; now its 2010 and things have changed.

Google's CEO says its all got "complicated", while Jobs prefers to chat about his sex life. The latter points out that "Just because we're competing with someone doesn't mean we have to be rude"

He didn't say how rude he thought the anti-Jobs rhetoric expelled by Google engineering VP Vic Gundotra at Google I/O last month was.

"If Google did not act, we faced a Draconian future in which one man, one company, one device, one carrier would be our only choice. That's a future we don't want," Gundotra said.

Quite right too. After all, behind the 'don't be evil' rhetoric, Google's Android vision is actually one in which three men (Schmidt and Google founders, Larry Page and Sergey Brin) get to decide the shape of the future.

That's three times more ecumenical, right? Three times more open. And you get Flash. And Porn. That's got to be loads less evil, right.

Whatever.

Sledgehammer

This morning US regulators reveal they're investigating Apple's move to ban AdMob from its 100 million strong network of iOS-powered mobile devices.

Apple's license now says:

The collection, use or disclosure is for the purpose of serving advertising to Your Application; is provided to 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); and the disclosure is limited to UDID, user location data, and other data specifically designated by Apple as available for advertising purposes.


Admob's CEO, Omar Hamoui slammed Apple's deal as harming developers, saying,

"In the history of technology and innovation, it's clear that competition delivers the best outcome. Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress."


Google will be "speaking to Apple to express our concerns about the impact of these terms," Hamoui said.

But this is competition, argues Daring Fireball's John Gruber, "If Google hadn't declared war against the iPhone, AdMob could still see in-app ads on iOS. They made their bed, now they have to sleep in it."

This is a big battle. J.P.Morgan estimates that $250 million will be spent on mobile ads in 2010 alone.

With so much at stake, consider YouTube, which now has ads, ads which themselves could be prohibited by Apple's new agreement.

Will Google be prepared to continue to serve up video content to iOS users if it is unable to make money out of the service?

ComScore tells us Google's video sites delivered 13.2 billion videos in the US in December 2009. YouTube delivered 99 percent of all videos viewed -- 39.8 percent of all videos watched in the US.

If Google were to switch off YouTube on the iOS, what could Appe's contingency plan be? How personal will this battle get.

After all, "At an estimated $220 billion in the USA alone, the market is simply too large to ignore. If they fail to move aggressively, they'll forfeit that to GoogleTV," Inside Digital Media analyst Phil Leigh claims.

Across the universe

Speaking during D:All Things Digital last week Jobs argued that the user interface for television needs changing, and that the broadcast business model needs to change to stimulate innovation.



Principally, he noted the effect of ads on TV, which subsidize those set top boxes.

Could iAds offer a similar ambition within the future of Apple's walled garden for content? A garden which now counts 100 million users, and rising. And is growing at a rate faster than the rate of adoption of the TV?

The iAd platform will go live on July 1.

We'll see what happens next.

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