Actually, I suspect that it might mainly be the video download functionality that's made Google pissed off. They've mostly turned a blind eye to blocking ads on YouTube - there's even extensions on the Chrome Web Store specifically advertised as YouTube ad blockers - but they're really aggressive towards YouTube downloader software. (Though they're probably less willing to turn a blind eye in general when platform owners like Microsoft do it.)
But if app is not using official YouTube API, then TOS for API are not applicable for it. So in legal sense this must be equal to browser with built-in ad blocker. Except trademark problem.
(Edit: looks like that submission is getting flagged as well. I guess this story really isn't showing Google is good light if Google fans are in such heavy damage control mode. It looks like they have a veto on what appears on the HN front page. Look you may not like Microsoft and even its response but why try to bury a legitimate news item? Not enough Google I/O posts on front page? ).
"We’d be more than happy to include advertising but need Google to provide us access to the necessary APIs.
In light of Larry Page’s comments today calling for more interoperability and less negativity, we look forward to solving this matter together for our mutual customers."
I wonder what happens if Microsoft doesn't back down till they get access to the ads API, will Google file a lawsuit? Interesting times!
The issue that triggers that problem is that Google refuses to either give them access to the YouTube API like it does for iOS and Android or makes a WP app itself.
