Why Googles Mobile Ad Plans Are in Trouble

By Clint Boulton  |  Posted 2010-04-10 Print this article Print

Previously, the app had to be closed so that another function could be opened. This is a big departure from the classic banner ad, where users would click and launch a browser to see an ad, and not get back to where they were before.

While there is a subset of iPhone users who will shrink from the prospect of interacting with ads, there is no escaping the feeling that Apple has outmaneuvered Google, at least for now.

Enderle Group analyst Rob Enderle told eWEEK this appears to be a much better thought out way to tie advertising revenue back to applications. Kelsey Group analyst Michael Boland wrote in his blog:

"It's a bold but logical platform for building, distributing and displaying mobile ads. Its deep integration with the device and operating system is perhaps its biggest advantage. This will enable the mobile ads and campaigns we've been waiting for."

A Google spokesperson declined to respond to the idea that iAd poses a competitive threat to its mobile ad business, but he did note: "This is more evidence of how quickly mobile advertising is evolving and growing."

Still, Google has much cause for concern and that statement was more for the benefit of the Federal Trade Commission, which is poised to block Google's $750 million proposal to acquire mobile ad provider AdMob.

The irony is that Apple was poised to buy AdMob, which is the leading maker of in-app advertising for the iPhone, before Google "snatched them from us," as Jobs admitted during the event.

Apple instead acquired AdMob rival Quattro Wireless for $275 million and formed iAd. Google is sweating the possibility of having its mobile ad plans dashed because regulators believe letting Google have AdMob will give it a near monopoly in the mobile ad market.

"This is a competence much closer to Google's and Apple has clearly outdone Google with this announcement," Enderle told eWEEK.

"This would be like a top tennis player going one-on-one with a top basketball player in basketball and winning by showcasing moves the basketball player had never thought of. Incredibly embarrassing for Google. In this instance, rather than being upset, I'll bet the Microsoft folks are silently cheering for Apple."    


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