Always something new out of Cupertino

Brad Stone has the story in The New York Times:

Apple is getting into the advertising business. On Thursday the company unveiled new software for its mobile devices that has a built-in system for putting ads into applications. Speaking to press and developers on Apple’s campus here, Steven P. Jobs, Apple’s chief executive, said that the new system, iAds, would offer ways for developers to include complex interactive ads in applications for the iPhone, iPad, and iPod Touch. Apple said it would sell and host the ads and give developers sixty percent of the revenue from ads that run in their programs.
Mr. Jobs sharply contrasted the market for ads on mobile phones with the way Google has profited on PCs, by running ads on the Web alongside search results. “Search is not where it’s at” on phones, he said. “People are not searching on a mobile device like they are on the desktop.” Instead, he says, smartphone owners are getting all of their information via apps, so search ads are not as effective. He said the iAd platform would give developers a way to keep prices for their apps low, or free.
Demonstrating the service, Mr. Jobs clicked on an advertisement for Toy Story 3 in an application, and was transported to a screen with video, games, and offers for theater tickets for the coming Disney film. When he closed the ad, the screen switched back to the application. “This is not a get-rich-quick scheme for Apple,” Mr. Jobs said. “This is us helping our developers make money so they can survive and keep the prices of their apps reasonable.”
The ads will be seen only on Apple’s products, and it is not clear whether Apple has any ambitions to sell ads on other mobile platforms, like those controlled by Google, Microsoft, and Research in Motion.
Mr. Jobs confirmed a bit of Silicon Valley drama by conceding, in a question-and-answer session after his presentation, that Apple tried to buy the big mobile advertising company, AdMob, but that Google “came in and snatched them from us. They didn’t want us to have them.” Instead Apple bought a smaller company, Quattro Wireless. But Mr. Jobs said Apple was still “babes in the woods” when it came to advertising.
The iAd system will be part of version 4.0 of the iPhone OS, the software at the core of the iPhone, iPod Touch, and iPad. It will also include one much-anticipated feature, the ability to run multiple non-Apple applications at the same time. Other new features include the ability to give apps as gifts, and a new gaming center that will allow owners of Apple devices to play video games against other people.
The new software will be available for owners of the most recent iPhones and iPod Touches this summer, and for the iPad tablet later in the year. It will not run on the older iPhone 3G.

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