Google muscling into iPhone ad market

More search to complement display ads on the fast-growing mobile platform

You knew this was coming, but some mobile ad startups might have hoped it wouldn't happen this fast.

Two months after Google CEO Eric Schmidt predicted that his company would eventually generate more revenue from mobile ads than from the desktop, the company unveiled a service that will let ad buyers target search ads at iPhone users.

One might have guessed that Google would have waited until the Android-run G1 hit the shelves and used that rival platform to make a push like this. 

But the iPhone is the fastest-growing mobile platform, and Google is telling advertisers it's ready to help them get access to it. No word on whether the service will be up and running on the iPhone before the G1 hits stores later this month.

The decision shows that Google remains platform agnostic and that despite its development of Android, the company knows how it's bread is buttered -- with search ads.

In one sense, the move will turn up the heat on AdMob, JumpTap and other mobile ad firms by increasing competition for mobile ad dollars.

Still, search may prove more complementary and less competitive to what those smaller firms have been focusing on: iPhone-targeted display ads that take advantage of the device's rich-media features and applications.

Greg Yardley of PinchMedia, which provides iPhone ad and application analytics to developers, told us he thinks the Google iPhone push is all good.  

"Mobile has long suffered from a lack of advertisers (it's still largely seen as 'experimental' by most) and Google's involvement in the iPhone space is absolutely terrific, because it'll bring more advertisers to the ecosystem...  

"Ad rates are largely a function of supply and demand.  At the moment, I believe the amount of mobile ad space to be bought is increasing at a faster rate than the number of advertisers doing the buying, so I've been expecting rates to decline. By bringing additional advertisers into the system to buy up that excess inventory, Google could possibly tip the scales in the other direction."

(Photo courtesy ipadrblog.com, newlaunches.com)