Google slams Apple over iPhone ad ban

Latest brawl between the mobile rivals is 'just business,' says analyst

Google today attacked Apple's apparent decision to ban some third-party ad networks from collecting ad performance data on the iPhone and iPad.

The latest brouhaha between the two rivals stems from new language in the terms iPhone, iPod Touch and iPad developers must agree to.

Ad analytics collection is prohibited unless it is "provided to an independent advertising service provider whose primary business is serving mobile ads," Apple's revised terms read. "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 seems to bar mobile ad company AdMob, the company Google acquired in late May for a reported $750 million, from Apple's devices.

And that prompted AdMob founder Omar Hamoui to blast back.

"This change is not in the best interests of users or developers," said Hamoui in a blog post on the AdMob site today. "Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress."

According to AdMob, the number of Apple mobile devices -- iPhone, iPod Touch and iPad -- that reached its network in April outnumbered those powered by Google's Android platform by more than 3.5 to 1. Of all the ad requests it served in April, nearly 32% went to iPhones and iPod Touches.

"If enforced as written, [Apple's terms] would prohibit app developers from using AdMob and Google's advertising solutions on the iPhone," said Hamoui. "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."

Industry analysts agreed that the new terms -- which were first reported by the MediaMemo blog on Tuesday -- lock out Google's AdMob.

"The new wording could be interpreted as banning non-independent advertising platforms, like AdMob," said Karsten Weide of IDC. "It seems pretty clear: Application developers can't be on the AdMob network."

But Weide also acknowledged that it was possible Apple's intention was different. He has asked Apple for clarification, but has not received an answer. Apple also did not respond to a request for clarification from Computerworld.

"It looks like Apple is choosing to exclude its biggest competitor from the iPhone," Weide said. "That mans more revenue for Apple in the short term, since ads would flow through its [iAd] system rather than through Google's [AdMob.]"

On Monday, Apple CEO Steve Jobs aggressively touted iAd -- Apple's own mobile ad platform -- that he boasted would own 48% of the mobile advertising market by the second half of 2010. iAd, which lets application developers place interactive advertising within their software, is set to launch July 1.

"Apple may be letting others in, but it's tilting the playing field," said Andrew Frank, an analyst with Gartner Research. "But the terms aren't incredibly clear. iAd is going to need some independent analytics, so a ban of everything definitely won't work."

Most analysts, including Weide and Frank, interpreted Apple's revised developer terms as saying that ad analytics are allowed, as long as the firms collecting the data are independent of a rival mobile device or operating system maker, and as long as Apple gives its okay.

"In the long run, I don't think this is very productive," said Weide. "A closed system like Apple's may make a better product, but it dampens competition and technical progress. So it's bad in the long run."

But for Apple, it's all about business -- and money, the two analysts said.

"It all comes down to money," said Weide, who believes that Apple's move is not a direct poke in Google's eye.

"It is just business," Frank agreed. "Google is the biggest competitor Apple has, but it's not the only competitor."

Minus a public clarification from Apple, it's impossible to gauge the Cupertino, Calif. company's true intentions, said Frank, or even the boundaries of the new terms that seem to bar AdMob from the iPhone.

"No doubt, this will be tested at some point," he said. "And then we'll know."

Copyright © 2010 IDG Communications, Inc.

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