Google Ads on iPhone Apps

There are two ways for iPhone application developers to make money from their apps. They can charge people to subscribe to their apps (usually .99cents to 9.99) or they can run ads on their apps and collect advertising revenue.

The only ads we've seen on the iPhone and iPod Touch apps are run by AdMob. And Silicon Alley Insider recently reported that AdMob ads have seen incredibly growth on these apps over the past year.

In the month of February AdMob served up 1.2 billion ads to iPhone and iPod touch devices. A year earlier that number was only 33 million ads.

That is astounding growth, and it is likely to continue at an outstanding clip. Apple has now sold over 30 million of these devices and a few additional million people are buying them each month.

But it looks like AdMob will see a formidable rival in this space soon. Google has started testing ads on iPhone apps.

VentureBeat has confirmed that Google is testing the ads with Urbanspoon on their restaurant review app. (You can see the Google ad identified with the 'g' above.) How long till they are available as a source of income for developers? We'd guess it could be as early as a couple of weeks from now.

What kind of new revenue potential are we talking about for Google here? It must be enormous when you consider it will be several billion views per month very soon.