updated 04:00 pm EST, Fri January 15, 2010
Apple Quattro deal about fixing mobile ads
Apple's deal to buy Quattro is part of Steve Jobs' own goal of 'fixing' the mobile ad space, an apparent scoop claimed late Thursday. An inside source said to be familiar with his views says he believes "mobile ads suck" and that Apple plans to overhaul iPhone and iPod touch ads in the same way they did music with iTunes. These would be "completely new" and could do away with many forms of search.
The move would be a response to trends in iPhone apps and complaints from developers. Many have felt compelled to offer apps for free but have griped that ads from AdMob and other mobile promoters don't generate enough money to support their businesses. Paid apps have also hovered near the 99-cent mark and themselves have little profit.
It similarly represents a reaction to Google's acquisition of AdMob, the leading mobile advertiser. Observers often believe that Apple tried to buy AdMob itself but was thwarted when Google suddenly stepped in with its own bid. Leaving the newly merged advertiser would not only give Google control of more than half of iPhone ads but Android and many other platforms as well. Buying Quattro not only helps keep AdMob in check but gives Apple the opportunity to integrate its own commercial system with ads, such as closer monitoring of click-throughs and impressions.
Both the AdMob and Quattro deals represent increased friction between companies that had previously been extremely close. Google continues to provide much of the underlying web and map searching on the iPhone and has a presence in apps like iMovie with YouTube, but it has repeatedly had to back away as first Android and now Chrome OS put it too much into direct conflict with Apple's objectives. Neither company has openly cut its links with the other, but Apple has taken steps such as acquiring Placebase to avoid depending on Google for map data.