Omar Hamoui, founder of AdMob, a mobile advertising startup which Google bought last year, said Apple's new terms of service for application developers would bar the use of AdMob or Google advertising solutions on the hot-selling smartphones.

Google dominates Web advertising but has been jockeying for position with Apple in the nascent mobile advertising space, which is expected to see strong growth over the next few years.

Apple's iPhone is the leading platform for the mini-programs known as applications and Apple chief executive Steve Jobs said Monday that more than 225,000 applications, or "apps," are available in Apple's App Store.

Apple has also developed its own advertising platform, iAd, which allows software developers or ad agencies to embed ads directly into applications being offered for the iPhone, the iPod Touch and now the iPad, Apple's new touchscreen tablet computer.

Apple will sell and host the ads and give developers 60 percent of the revenue while keeping the remaining 40 percent.

AdMob's Hamoui, in a blog post, said that Apple's new terms of service "if enforced as written, would prohibit app developers from using AdMob and Google's advertising solutions on the iPhone."

Apple's new terms, which were first reported by the All Things Digital blog MediaMemo, would appear to prohibit Google -- and also Microsoft -- from collecting user location data from applications running on the iPhone.

Location data is considered extremely important by mobile advertisers because it allows them to deliver ads that are more relevant to users.

Apple's terms state that only an "independent advertising service provider whose primary business is serving mobile ads" can collect such data.

"An advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple would not qualify as independent," they say.

Google and Microsoft are both developers of mobile phone operating systems and Google also sells its own smartphone, the Nexus One, so the terms would appear to impact AdMob, which Google purchased for 750 million dollars last year.

"These advertising related terms both target companies with competitive mobile technologies (such as Google), as well as any company whose primary business is not serving mobile ads," AdMob's Hamoui said.

"This change is not in the best interests of users or developers," he said. "Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress.

"We'll be speaking to Apple to express our concerns about the impact of these terms," Hamoui said.

Dismissing anti-trust concerns, the US Federal Trade Commission gave the green light to Google's purchase of AdMob just last month, in part because of the existence of Apple's competing mobile ad network.

Apple said Monday that iAd will debut on the iPhone and iPod Touch on July 1 and that it has already attracted iAd commitments worth more than 60 million dollars for 2010 from AT&T, Nissan, Disney and other companies.

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