When Apple entered the advertising market, many wondered how it would compete against Google on its home turf. The answer is simple, they won’t. At AllthingsD conference Steve Jobs promised to open up its ad network to allow for third party ad networks and today, Apple has held that promise.
The key here is that, yes, Apple did open up its platform to third party advertisers but the catch is that they must be independent third party advertisers. According to allthingsd.com, Apple defines independent as: "for example, 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”.
This language clearly kills any chance of Google entering the iPhone advertising market by using Apples services and will also keep out Microsoft. Apple is picking a tough fight with its former colleague; Google is quite powerful and by locking them out of the iPhones advertising, its hitting Google right in its proverbial heart.