Are Apple making a play to cripple Google/Microsoft?

Just a thought that came out of a café conversation with Conor; the increasing effort from Apple to eradicate Adobe’s Flash platform from their devices could be a subversive attack on the advertising revenue of both Google and Microsoft.

We know that Apple owns the high end of consumer laptop purchases and holds a significant chunk of the smartphone market. We also know that a savvy, well-to-do audience commands the best per-click advertising rates. It wouldn’t be strange then for one speculate that in the demographic of “higher income earners” there is not insignificant crossover between high-end targeted online advertising and consumers of Apple mobile products.

Flash is popular because of video sites like YouTube, Vimeo, etc, and for various gaming applications (Farmville on Facebook being an obvious current example). Flash-based advertising has been a side effect of this widespread popularity, cleverly piggybacking on consumer desire for video/gaming content in order to deliver more effective campaigns. Flash advertising is the price we pay for video and gaming content.

Moves by Apple to explicitly ditch Flash coupled with the W3 Consortium’s inexorable march towards the implementation of HTML5 are converging to remove the reward for having Flash available as a content delivery mechanism. If the only thing Flash delivers is advertising, why would anyone wish to have it?

Advertisers rely heavily on Flash to deliver rich media advertising to Internet users.  It’s hard to imagine an industry, one which has had great difficulty in embracing the Internet in the first place, mobilizing to change their entire infrastructure from one based almost exclusively around Adobe’s proprietary Flash product to something unknown, overnight.

Clearly, this is not something that is actually going to occur overnight, though Apple, by jettisoning Flash from the devices of a high-yield demographic, could reap huge rewards relatively quickly. It doesn’t even need to come up with it’s own advertising solution to replace the hole it leaves – simply destroying that chunk of revenue for Google and Microsoft may be enough to begin destabilizing the incumbent online advertising market.

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  1. Posted February 20, 2010 at 7:41 pm | Permalink

    If they are attacking Flash as a dig at Google and/or Microsoft’s ad revenue then I’d imagine it’s not to damage the ad market but merely as an attempt to kill some revenue generators for those companies.

    Of course, there’s the other reason they’d attack Flash. They’ve seen how much money Adobe has extracted from the Mac-using demographic over the years and they want a slice of that. They’ve been moving into Adobe’s space for a few years now with products like Aperture and Final Cut Studio. More than half of Adobe’s revenue comes from their creative products and I’d imagine Flash is a decent earner for them.

  2. Posted February 22, 2010 at 8:10 pm | Permalink

    I don’t think it’s about advertising for two reasons – you can make plenty of interactive ads in HTML5 too and Many of Google’s ad revenue comes from text-only ads, an area they innovated in.

    If you’re interested in the background of Flash, this is a great post by John Nack from Adobe. It’s important to remember that Adobe make _no_ money from the Flash player, if HTML5 offered everything the Flash player did, they could stop spending all that money on it, and just create authoring tools for HTML5. HTML5, despite all the fuss, isn’t supported by IE, which makes it very hard to take seriously in the short-term.

  3. Posted February 28, 2010 at 12:04 pm | Permalink


    I agree, it’s not going to hurt Google much. Remember though, Google own Doubleclick and their entire toolchain revolves around Flash. It would be quite tricky to get all of the ad creators to drop Flash and move to whatever is the most suitable replacement. Also, as you say, HTML5 isn’t here yet (and probably won’t be for a while) so the replacement options are pretty bad. Animated GIF? No rollover events, no expansions, no interactivity. HTML+JS? The overhead won’t be acceptable to publishers and the performance will suck on older browsers. Right now, Flash is the only game in town for non-text advertising and moving off it would be an extremely painful experience for the advertising industry.

    Yes, it’s true that Adobe don’t make any money on the Flash Player. They make a ton of money on the authoring tools though. If Flash Player (loss maker) goes away, so does Flash (profit maker).