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Tim's argument is simply that free is not free: google's business model requires them to monetize your pictures, through advertising etc. Apple's business model is to charge you for it.

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So why they have an ad network? Why they collect your searches in iOS and OSX? They don't mind doing what Google does on top of premium prices but they can't.

Not sure why they have an ad network probably so they can own the entire end to end stack and take advantage of the growth in mobile advertising.

And they collect your searches on iOS/OSX for Spotlight which is used to implement the web site suggestions features. Easy to switch off.

iAd gives developers an easy way to run an ad-supported game/etc in the App store without the compromise in personal privacy (for the player/user) that comes from an ad network like Google's, that is heavily focused on highly targeted ads.

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