Apple changed the language of the agreement on Monday. As written, it appears to prohibit certain third-party ad agencies from collecting critical usage data from iPhone applications. This would hamper rival ad agencies' ability to target their ads and make it more difficult to compete with Apple's own ad network, which is set to launch July 1. "This change is not in the best interests of users or developers," Omar Hamoui, founder of mobile ad company AdMob, said in a blog post. AdMob was recently purchased by Google.

Hamoui said Google will raise its concerns with Apple, which has declined to comment on the new terms of its developers agreement. "Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress," Hamoui said. AdMob recently disclosed that roughly one-third of the ads it served in April were for devices running the iPhone platform. The iPad and the iPod touch also use the software.

The initial language of Apple's new iPhone developers agreement, which emerged in April, prohibited data about app usage to be transmitted to any outside analytics companies, which help agencies target their ads.

Those rules rankled some app developers and generated questions from the Federal Trade Commission, one developer said.

Last week, Steve Jobs promised that his iPhone and iPads would be open to outside ad networks. Yesterday, Apple made good on his promise, by changing the terms of its developer agreement. But the company may not have opened the door all the way.

3.3.9 You and Your Applications may not collect, use, or disclose to any third party, user or device data without prior user consent, and then only under the following conditions:

Apple just totally screwed Google's effort to sell ads in iPhone apps.


In the process, Apple revealed just how scared it is of Google -- it's completely terrified.

What did Apple just do?

It basically just neutered all iPhone advertising players whose primarily business isn't serving mobile ads -- like Google.

It also neutered iPhone ad companies that are owned by or affiliated with companies that distribute mobile devices and platforms -- like Google, Microsoft, Nokia, and others.

Essentially, Apple's new developers agreement, as we understand it, effectively limits the companies that can sell ads in iPhone apps to Apple (via its new iAd program) and pure-play mobile ad networks like Millennial and JumpTap. (Apple's terms "would prohibit app developers from using AdMob and Google’s advertising solutions on the iPhone," AdMob CEO Omar Hamoui writes in a blog post.)

In other words Apple is stabbing all of its big, real competitors in the neck. And the biggest loser in all of this, of course, is Google, which is quickly becoming Apple's biggest rival.