Apple is rumoured to be considering ending its partnership with Google and moving on to Bing instead. In fact, they have already included Bing as one of the search engine choices on Safari.

More worryingly for Google, the recently acquired mobile advertising network, AdMob, will reportedly be blocked by Apple. iPhone users constitute the largest market segment for AdMob.

In order to avoid regulatory problem, Apple is shutting out AdMob in a rather sly manner. The iPhone manufacturer has changed the developer agreement for the iPhone in such a manner that AdMob could be completely excluded from its services.

The new agreement states that ad networks will be allowed to share data only if the data “is provided to an independent advertising service provider.” In case there was any ambiguity, Apple goes on to clarify that “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.”

Google develops mobile devices – Nexus One. Google has its own operating systems Chrome OS and Android for mobile. And Google is the driving force behind the Android development environment. Thus, the new agreement squarely shuts out Google-owned AdMob.

Apple has only recently announced the availability of iAds, its own ad-serving platform, and has already generated $60 million worth of commitments for mobile ads that will run in the second half of 2010. While the amount is almost negligible compared to the $23.7 billion that Google earns from advertising, the fact that it was done in just 8 weeks is definitely noteworthy. Also, these commitments have been made by well reputed brands such as Unilever, General Electric and Citigroup.

Colin Gillis, a financial analyst at BGC believes that mobile ads could generate 10% of Apple’s revenue by 2012.

While Google’s mobile operating system, Android, is doing quite well, it is still ranked fourth worldwide behind, Nokia’s Symbian, BlackBerry’s Research in Motion and Apple’s iPhone respectively.

AdMob founder and CEO, Omar Hamoui, says, “We are extremely pleased with today’s decision from the Federal Trade Commission to clear Google’s acquisition of AdMob”

The FTC had to seriously consider the impact of this deal on competition. The search leader’s biggest potential competitor, Apple, unwittingly helped Google by announcing plans to start their own mobile ad network.

Google advertising already includes industry-leading platforms including DoubleClick, AdWords, AdSense and Analytics. AdMob adds to Google’s product offering and will solidify their position in the mobile industry, irrespective of Apple’s attempts to break into the mobile ad industry.

Wasting no time over the question of whether or not the deal would be approved, Google has already been developing a number of new mobile ad formats, which were announced during I/O.

One of the new formats will be expandable ads for mobiles. Google will also enable click-to-call ads for mobile content and apps in the next few weeks. Click-to-call ads will work for ads on the mobile content network and on mobile apps. Advertisers can enable them by enabling phone extensions in an AdWords campaign that targets mobile handsets with full Internet browsers. The ads will appear as animated banner text ads with a call button. Advertisers can enable the click-to-call service by first ensure that their campaign is set to show on “All Available Sites”, setting up phone extensions, providing the business phone number and then choosing to show ads on “Mobile devices with full Internet browser”.

AdMob is based in Silicon Valley and was founded by Omar Hamoui in 2006.

Google has agreed to pay $750 million for this acquisition which will help them to improve their mobile advertising technology. So far Google has been concentrating on Mobile search ads, while AdMob’s specialty is mobile display ads and in-application ads.

Besides helping improve Google’s technology, this deal is sure to bring cheer to publishers of mobile websites and applications as it will provide them with better tools for monetization, thus helping them to offer better services to their users.

It will also help advertisers to reach out to their audiences on the mobile web by providing them with more relevant ads through engaging formats.

Eventually these changes are good for the user, who will receive better mobile content, information and ads which will be useful to him for free or through low-cost mobile apps.

In other words this deal is a win-win situation for all concerned and will be good for the future of the mobile web which has already been gaining in importance in the recent past.

Mobile phone users worldwide have been growing by the minute, and that obviously means that the mobile ad business will continue to grow further.

According to estimates by eMarketer, the total number of mobile users by the end of this year should be 280.8 million and according to comScore, the number of smartphone users should touch 29 million by then.

AdMob has stated that the number of smartphone shipments worldwide is projected to grow by 13%.

eMarketer also estimates that the mobile ad spend in the U.S. alone will increase from $648 in 2008 to $760 in 2009.

One of the main reasons for this growth in mobile ads is the availability of better mobile websites, which have been optimized for use on mobile phones. Thus users find it easier and more interesting to access the net through their mobile phones.

AdMob which was founded in 2006 with just one employee, and has grown to 85 employees in January 2009, has done very well for itself, particularly in the last year due to these changes in the mobile internet experience. Since June 2008 their monthly ad requests has have grown to 8.3 billion.

According to the analytics firm Nielsen, AdMob is now the third largest mobile ad company in the U.S. after Millennial Media and Third Screen Media.

Their mobile ad revenue is expected to go up by 18.1% this year to $1.3 billion.

When these figures are compared to that of newspaper ad revenue which will be down by 18.7% to $35.5 billion, radio ads which will be down by 11.7% to $15.8 billion and TV ads down by 10.1% to $43 billion one can get a true estimate of how well mobile ads are doing.

This announcement will be good news for mobile publishers. It will eventually improve their income through automated access to various networks, thus helping to fill available inventory. The earlier practice often tied down publishers to a single network. Now they are in a position to choose whichever network offers them the best deal.

Ari Paparo, DoubleClick’s product manager says, “This integration is a great example of how DoubleClick is working with key industry players, to bring value to publishers by enhancing the liquidity of mobile display inventory. Publishers who have a tie up with DoubleClick Mobile will be able to sell mobile inventory indirectly through any of the above networks.

DoubleClick Mobile will provide details about what inventory has sold directly, what has been taken up by the ad networks and what is still available for sale. Publishers will have better income earning potential through direct and indirect sale of ads.

Paul Palmieri, President and CEO of Millenial Media, believes that the tie up with DoubleClick Mobile will allow publishers to accept ads from their own roster of leading advertisers without limiting their right to direct sales, thereby bringing more publishers into mobile advertising. Although DoubleClick is a part of Google, they have decided to remain neutral (for now) in order to benefit their publishers.

With the number of mobile Internet users increasing, publishers are naturally expected to try and use this opportunity to the best possible extent to maximise both direct and indirect sales.

Ad Serving By Region

Indian mobile users were served the second largest total of impressions on AdMob’s network, after the USA. This surprising statistic could be due to a higher level of market penetration achieved in the sub-continent compared to other places such as Japan, the UK, France and Spain. North America and Asia were also the most popular regions as seen in the chart below:

Source: AdMob Network Metrics

AdMob served 85 million ad impressions in the UK, making it their fourth largest market, after the United States, India and South Africa. While these numbers are obviously skewed due to AdMob’s own market limitations, they are by no means insignificant and demonstrate the size of many non-European mobile Internet markets.

Popular Handset Manufacturers

The report also provides data on the top mobile handsets based on percentage of ad impressions served by AdMob, as seen in the chart below.

Source: AdMob Network Metrics

The most interesting statistic that can be found from these numbers is the worldwide increase in popularity of Smartphones. Three of the top five devices used in the USA are smartphones. 74.6 percent of mobile phones on AdMob’s worldwide network were found to support polyphonic ringtones, 81 percent support WAP push messages and 59.2 percent were able to download video clips.

In the UK, the most impressions were delivered to Nokia (32.6% impressions), Samsung (27.9% impressions) and Motorola (20.7% impressions) handsets. The Motorola V360 (12.1%), Samsung E250 (6.5%) and Nokia N70 (4.0%) were the most popular handsets.

AdMob hired Facebook’s Vice President of Engineering back in February of this year. Todaym they have become the first platform to provide advertising on Facebook Mobile, hardly a week after Facebook Platform for Mobile was launched.

Application developers can integrate mobile advertising from AdMob into any application developed for Facebook Mobile. AdMob provide developers a sample application called AdMob Footprints, based on Facebook’s own developer resource called Footprints. The tool, which is coded in PHP, can be used as the starting point to build apps that have the mobile advertising function already included.

The best way to monetise Facebook and other social networks at present seems to be by tapping into their application developers. Yesterday’s news from Google about Open Social seems to indicate this and so does AdMob’s strategy. When Facebook launches its own advertising platform, though, it could end up competing with other ads from outside its own network, which could very quickly lead to ad fatigue among users if Facebook is not careful.