Apple goes into the mobile ad business

Dylan Bushell-Embling
12 Apr 2010

Apple has built an ad platform into its new iPhone OS, once more invading archrival Google’s turf.

Apple said the new OS will include an advertising capability called iAd, which will allow apps developers to run ads in their software, giving them a potential revenue stream from the App Store.

Apple plans to sell the ads and give developers of apps which host them a 60% cut of the revenue.

The platform will deliver full-screen video and interactive ad content within apps, letting users to return to where they left off, Apple said.

The New York Times quotes CEO Steve Jobs as saying the mobile ad market is distinct from the PC search market, which has been dominated with Google's search-based ads.

“People are not searching on a mobile device like they are on the desktop,” he said.

He also said the platform was designed primarily to help developers. “This is not a get-rich-quick scheme for Apple,” Jobs said. “This is us helping our developers make money so they can survive and keep the prices of their apps reasonable.”

The Apple chief confirmed long-held suspicions that the company had bid for mobile adv company AdMob before Google snapped it up for $750 million.

With US regulators threatening to challenge Google's purchase of AdMob, Apple’s entry into the mobile ad market throws another obstacle in the way of the search firm.

The market is just developing - researchers estimate that US advertisers spent just $416 million on mobile ads last year, compared to an overall online advertising market of $22.4 billion, WSJ.comsaid.

But not every change on the iPhone is aimed at making life easier for developers. The company also updated the license agreement for its iPhone Developer Program, banning the use of third-party compilers for creating apps for the iPhone OS.

The move is a shot across the bows for Adobe, which was planning to create a compiler to allow developers to create apps in Flash and then port them to the iPhone or iPad - neither of which support the technology.

In a blog post Adobe CTO Kevin Lynch acknowledged the change, but said “it is up to Apple whether they choose to allow or disallow applications as their rules shift over time.”

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