Mobile applications have been receiving increasing business interest recently, as their functionality and capabilities have quickly increased. The early platform leader in mobile applications has been Apple. This is partially due to the fact that they were the first mover and created the first highly usable online application store. The success of this store became clear when Apple recently announced that they had reached 1 billion downloads.

While a significant amount of money has been made on the sales of applications through outlets like the iTunes store, many of the newest applications being distributed are low in price or are free, which has pushed down the average price of mobile applications and has encouraged developers to look for other revenue streams. Google, whose mobile Android operating system has not caught up to Apple yet in attracting developers, has decided to entice developers of low-cost applications with the roll-out of the beta of AdSense for Mobile Applications

AdSense for Mobile Applications allows mobile applications to display text and image ads on Android and iPhone applications. The ads will be similar to Google’s other AdSense system, and advertisers can bid for placement based on keyword, demographics and location, and they can bid directly for a specific application. Also, developers will be able to filter out ads that they don’t want to show in the application.

Popular applications will likely be the main beneficiaries of mobile AdSense in the beginning. Advertisers will likely not bid much until they are confident that the new ads are paying off. However, if the initial uses prove to be positive, the bidding will increase, and the use of ads on mobile applications could explode in a relatively short period of time and further drive down the price of mobile applications.