Apple won't include YouTube app in new mobile software

Attendees sit in front of an Apple logo during the Apple Worldwide Developers Conference 2012 in San Francisco, California June 11, 2012.

Credit: Reuters/Stephen Lam

By Alexei Oreskovic

SAN FRANCISCO | Tue Aug 7, 2012 12:59pm EDT

SAN FRANCISCO (Reuters) - Apple Inc's new version of its iPhone and iPad software will not include a pre-loaded app for Google Inc's popular video website, YouTube, Apple said on Monday.

It was the latest sign of the growing rivalry between the technology companies the once were closely aligned but now are vying for supremacy in the fast-growing mobile computing market.

Earlier this year, Apple said it would dump Google's mapping software from its mobile devices.

"Apple and Google are the mobile operating systems for the future and this is where the battleground is going to lie," said Needham & Co analyst Kerry Rice.

"If it's going to be a two-horse race, you certainly don't want to give the other horse any kind of lead," he said.

Google, the world's No.1 Web search engine, is also the maker of the most popular smartphone software with its Android operating system. In May, Google closed the $12.5 billion acquisition of Motorola Mobility, setting the stage for Google to more tightly integrate its smartphone software and hardware and mount a more direct challenge to Apple's iPhone.

Apple said in a statement on Monday that its license to include the YouTube app in the iOS operating system "has ended." Apple noted that "customers can use YouTube in the Safari browser and Google is working on a new YouTube app to be on the app store."

An Apple spokeswoman declined to comment on whether the company's YouTube license included any financial terms, or on whether Apple planned to replace YouTube with another pre-installed online video app from a different company.

YouTube has been among a handful of apps that come pre-loaded onto the screens of Apple's mobile devices since the original iPhone was introduced in 2007.

But the app, which was actually built by Apple using YouTube's standards, did not appear to be as full-featured as YouTube's own website: the YouTube app does not appear to feature any advertising, and the catalog of available music videos lacks many of the titles found on the website.

Analysts said Google was unlikely to take much of a financial hit from the move, though it could complicate Google's efforts to expand online services to the growing ranks of mobile users.

"It's a risk to Google's overall mobile approach and strategy, in that their services are not going to be as easy to find as they used to be," said ThinkEquity analyst Ronald Josey. "They need to be everywhere that users are."

More worrisome, said Josey, is what the move could mean for Google's deal with Apple to be the default search engine on the iPhone.

"The writing's on the wall that when search is up for renewal, there's a significant chance that Google may not be the default," said Josey.

Analysts believe Google generates a significant portion of mobile advertising revenue from iPhone users.

Former Google CEO Eric Schmidt once sat on Apple's board of directors, but the relationship between the two companies has frayed. Apple's co-founder, the late Steve Jobs, was quoted as saying he was willing to go "thermonuclear" on the search leader, after it decided to position Android against the iPhone.

News of YouTube's disappearance from Apple's mobile software came as Apple released a new test version on Monday of the iOS 6 software, which for the first time did not include the YouTube app. The final version of iOS 6 is due for release sometime in the Fall.

YouTube is one of the most popular destinations on the Internet, with more than 800 million unique monthly visitors who stream 4 billion videos a day.

Google said in a statement that it was working with Apple to ensure that it has "the best possible YouTube experience for iOS users."

Shares of Google finished Monday's regular session up 1 percent at $622.19. Apple shares were up 1.1 percent at $622.55.

(Reporting By Alexei Oreskovic with additional reporting by Gerry Shih; editing by Kenneth Barry and David Gregorio)

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After Farmville success, Zynga not ready to plunge into mobile

The corporate logo of Zynga Inc, the social network game development company, is shown at its headquarters in San Francisco, California April 26, 2012.

Credit: Reuters/Robert Galbraith

By Gerry Shih

SAN FRANCISCO | Tue Jul 10, 2012 8:10pm EDT

SAN FRANCISCO (Reuters) - Zynga Inc CEO Mark Pincus said Tuesday he remains wary of investing as heavily in mobile games as he has in proven Web-based titles like FarmVille despite an industrywide push toward catering to mobile devices.

Game industry observers in recent months have stressed that developers must adapt as Internet users worldwide shift toward spending time on smartphones and tablets rather than desktop computers.

Concerns that Zynga continues to rely too heavily on its Web titles built on top of Facebook's platform have weighed on the stock, which has fallen roughly 50 percent from its $10 IPO price in December.

Speaking at an industry conference in San Francisco, Pincus said it was "obvious" that game companies should be investing heavily in mobile games — Zynga itself splashed $183 million to acquire New York-based game studio OMGPOP in March — but added the company's emphasis remained on Web games, given uncertainties about how the mobile platform will mature.

"We invest north of $10 million in a potential franchise game like the Ville," Pincus said. "We can't make that investment yet confidently in mobile. And I'm confident in the next couple of years we'll get to the point where we can. But it's not there yet and I think it's a little chicken or egg."

Pincus said he was held back by some unresolved questions over the still-maturing mobile platform, such as whether the Adobe Air and HTML5 technologies will become accepted standards.

"We've made a huge investment in mobile, organically building up teams and products and with one large acquisition," Pincus said. "We're at the point where it's obvious that we all should be investing heavily. But I don't think we have that all-in confident moment. The flywheel isn't there in an obvious way."

Pincus's hesitation in the mobile market stands in contrast to Zynga's all-out approach to its Web hits, which feature sophisticated social mechanics that are constantly analyzed and refined by dozens of Zynga engineers even years after they are first released.

Titles like CityVille and FarmVille, built off Facebook's platform, have helped Zynga squeeze $1.1 billion in revenue in 2011 out of an average 223 million monthly active players in 2011.

In a move to wean itself off of Facebook, Zynga announced in June that it would open its platform to encourage independent developers to build games on top of Zynga's own network.

Zynga also unveiled a new slate of games. For its latest offerings, Zynga has poured 100 developers who have worked "well over a year and a half" to ship its new titles "The Ville," a Sims-like social game, and "ChefVille," a kitchen management game, Pincus said.

But any efforts to roll out these games across multiple platforms will prove difficult, if the past were any indication, Pincus acknowledged.

"We were too ambitious at first with FarmVille," Pincus said. "We spent a huge amount of engineering to build a totally synchronous game experience."

(Reporting By Gerry Shih,; additional reporting by Malathi Nayak; editing by M.D. Golan)

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