How Apple Inadvertently Boosted YouTube for Google in a Big Way

Over the past year or so, the rift between Apple and Google has widened dramatically. When Apple first shipped the iPhone, the company prominently featured pre-installed apps for YouTube and Google Maps. Both of those apps were built by Apple but tied into Google's services and data. Both of those apps have since been removed.

YouTube for iOS. Source: Apple.

In their stead, Google released standalone third-party versions, which has actually been a boon for iOS users. Apple's versions went for years without meaningful updates, and Google has been excelling in interface design recently. Also gone is the ambiguous branding and ownership -- both apps are now fully developed and maintained by Big G.

With YouTube for iOS, getting unbundled late last year has given Google a big boost.

Out with the old, in with the YouTube
The Apple-built YouTube apps didn't feature ads and instead probably entailed some contractual dollars flowing from Cupertino to Mountain View. When Apple ditched YouTube, Google simply submitted a new and improved third-party version to the iTunes App Store that was subsequently approved -- and features ads. The only tiny hurdle is that users now have to manually download the app.

The net result of the shift has been that Google's mobile video ad revenue from YouTube has skyrocketed, tripling in the past six months. Bloomberg reports that Wedge Partners analyst Martin Pyykkonen pegs mobile video ad sales from YouTube near $350 million. The analyst also estimates that YouTube overall contributes 10% of total revenue.

Phil Farhi, YouTube's director of product management, said Apple's decision to unbundle YouTube has driven a big uptick in revenue growth.

Online video streaming is very much segregated into fixed and mobile platforms. On the fixed side, Netflix is the dominant service provider, while YouTube owns mobile. A recent Sandvine study found that Netflix comprised nearly a third of all online video streaming for fixed access, while the tables turn in mobile in favor of YouTube at 27% of usage.

Ditching YouTube streamlined Apple's preinstalled-app development, and it just so happened to help Google in a big way.

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The article How Apple Inadvertently Boosted YouTube for Google in a Big Way originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends and owns shares of Apple, Google, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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