Google is announcing today that it's working together with Microsoft on a new YouTube application for Windows Phone. Following a fight with Microsoft over its unauthorized YouTube app, the pair appear to have resolved some of their differences. Google demanded that Microsoft should remove its app by May 22nd, but Microsoft issued an update to address some of Google's concerns earlier this week. Google says "Microsoft and YouTube are working together to update the new YouTube for Windows Phone app to enable compliance with YouTube’s API terms of service, including enabling ads, in the coming weeks."

Apply some pressure

Microsoft, for its part, has said that it's happy to include ads in its YouTube Windows Phone application if Google allows it and provides access to an official API. The Verge understands that Microsoft will have to use publicly available YouTube APIs like the JavaScript and IFrame ones, meaning its upcoming full application will likely lose functionality. These APIs have been available previously, but Microsoft has always complained that Google has prevented it from offering consumers a fully featured YouTube app for Windows Phone. Microsoft's move to release its own full YouTube Windows Phone application, instead of a simple link to a mobile site, was a clear move to thrust the issue into the public domain and apply pressure to Google to open up its API fully or face the risk of appearing unreasonable. It appears the situation hasn't changed as Microsoft will have to use a limited API to build its new app.

The controversy follows months of bickering between the two technology giants, and this latest episode follows an uproar that led to Google removing a block of its Maps service for Windows Phone users. A collaboration on a full application would clearly benefit mutual customers of Microsoft and Google who simply want to use a Windows Phone with Google's web services. Microsoft will now work with Google on the new app, and will "replace the existing YouTube app in Windows Phone Store with the previous version during this time," according to a Google spokesperson.

Update: This story has been updated to add additional information about Microsoft's API use. Effectively this means it's back to square one for YouTube on Windows Phone, and it's likely that some of the new full functionality will be removed in the final app that Microsoft is working on. We've reached out to Microsoft for comment, but the company is not sharing any additional information about its plans.