• Daily Finance, Friday, May 14, 2010 12:08 AM

Apple and Google are new and highly visible adversaries in the mobile Web arena. But what observers often overlook about their rivalry are their starkly different business models. Apple is still primarily a device manufacturer: 82% of its revenue comes from gadgets, 54% from iPhones and iPods alone. Google, is an advertising company: 96% of its income comes from ads. The thing is, in the mobile Web business, advertising is a much smarter long-term strategy, says Daily Finance.

 

Of course, Apple is moving into online advertising with iAd, which is based on technology Apple obtained in the January acquisition of Quattro. But Apple bought Quattro only after it failed to hook its first target: AdMob, which got snapped up by Google. That failed acquisition attempt underscores a daunting reality for Apple: Google not only has a head start in the online ad business but it has a deeper understanding of what makes ads sell online.

However, Justin Siegel, CEO of Mocospace, one of the biggest mobile social networks, says Apple pitched him iAds for his app. He says "they're gorgeous, and there's no comparison in the mobile ad world." He likes the quality of the iAds, and he thinks its smart of Apple to keep people in the apps as they view the interactive advertisements, reports the San Francisco Chronicle. Despite his enthusiasm for the product, he has reservations about iAds. Will Apple be able to provide enough advertisements to keep up with all the impressions he will produce?

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