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Google AdMob Blasts Updated Apple iPhone Developer Terms

The policy announced on Monday may prevent Google from distributing advertising on the smartphone.

Google has blasted Apple for new iPhone developer terms that appear to shut out the search engine from distributing advertising on the popular smartphone.

Apple disclosed the new policy on Monday, when the company introduced the fourth generation of the iPhone, which will be powered by a new operating system called iOS 4. Apple plans to release iPhone 4 June 24.

On Wednesday, Omar Hamoui, founder of Google's recently acquired AdMob mobile advertising unit, said Apple's developer terms for building iPhone applications would shut out Google and any company whose primary business is not serving mobile ads. Like Apple, Google works with developers in getting its advertisers into third-party applications.

"The terms hurt both large and small developers by severely limiting their choice of how best to make money," Hamoui said in the AdMob blog. "And because advertising funds a huge number of free and low-cost apps, these terms are bad for consumers as well."

Apple did not respond to a request for comment in time for this writing.

The terms found onerous by Google would prohibit sending user and device data from an iPhone to any company that isn't "an independent advertising service provider whose primary business is serving mobile ads."

"For example, an advertising service or provider owned or affiliated with a developer or distributor of mobile devices, mobile operating systems of development environments other than Apple would not qualify as independent," the terms say, according to an excerpt published on The Wall Street Journal's AllThingsDigital.

Because Google distributes a mobile operating system, Android, Apple's new policy could freeze out AdMob. Hamoui said he would be speaking to Apple "to express our concerns about the impact of these terms."

Google acquired AdMob last month, after a six-month investigation by the Federal Trade Commission, which concluded that the deal was unlikely to harm competition in the mobile advertising. A major part of the FTC's reasoning stemmed from Apple's decision to launch its own competing mobile ad network.

Apple on Monday said it would debut the iAd network July 1 on iPhone and iPod Touch devices running iOS 4. The company claimed to have $60 million in commitments from 17 major advertisers, including AT&T, Best Buy, General Electric, Nissan, Sears, State Farm, and JCPenney.

The iPhone's popularity has made it a major platform for mobile advertisers. In the United States, the Apple device accounts for a quarter of the smartphone market, second only to the Research in Motion BlackBerry, which has a 41.3% share, according to ComScore.

What makes the iPhone particularly appealing to advertisers is Apple's customer base, which leans toward higher earners with money to spend. In addition, smartphone users are searching more than ever, making them a prime target for ads. In May, Google said the number of mobile searchers it received had increased fivefold in the last two months.

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