Apple launches ad war with Google

Apple on Thursday introduced a new advertising platform for the iPhone and other mobile devices. The new iAd is a direct challenge to Google and could generate billions in new revenue

At an Apple event on Thursday, CEO Steve Jobs introduced OS 4.0 for the iPhone. The new operating system includes over 100 new features, one of which is called iAd. iAd is a new mobile advertising medium that will target mobile phone users with selective advertisements when using the Internet and Applications on their devices. Investors believe it could generate as much as $2.5 billion in new revenue each year. Brian Marshall with Broadpoint AmTech told AppleInsider that Steve Jobs has once again hit a home run. "While we believe multitasking was the single most incremental functionality added (of the 100+ new features), it is our view that [Apple's] new mobile advertising platform ("iAd") stole the show and will be significant to the financial model," Marshall wrote in an e-mail to AppleInsider, referencing one of the Operating System's new features, multi-tasking. The timing, according to BBC, of Apple's introduction of iAd is not a coincidence.

Steve Jobs's announcement comes at a time when rival Google's own mobile advertising initiative has become hamstrung by the US anti-trust authorities.

In November, Google outbid Apple to purchase leading mobile advertising company AdMob for $750m.

"Google came in and snatched them because they didn't want us to have them," said the Apple head. Admob already operates on Apple's handsets.

However, Google's plans immediately ran into trouble as the Federal Trade Commission chose to review the deal. Months later, a decision is still pending.

With the Internet market already saturated with advertisements, some see the Mobile Phone as the next battleground between tech companies. With the introduction of iAd, Apple seems prepared to challenge Google on that very front.