Just when you thought Microsoft and Google had found common ground over YouTube for Windows Phone, all hope is dashed.

Google is blocking the just-released YouTube for Windows Phone app, as noted by Tom Warren at The Verge on August 15. This is the new version of the app that, last we heard, was being developed together by Microsoft and Google.

Both Google and Microsoft are confirming Google is blocking the app.

Here's what Google is saying (via a statement from a spokesperson):

"We’re committed to providing users and creators with a great and consistent YouTube experience across devices, and we’ve been working with Microsoft to build a fully featured YouTube for Windows Phone app, based on HTML5. Unfortunately, Microsoft has not made the browser upgrades necessary to enable a fully-featured YouTube experience, and has instead re-released a YouTube app that violates our Terms of Service. It has been disabled. We value our broad developer community and therefore ask everyone to adhere to the same guidelines."

This is what Microsoft is saying (via a statement from a Microsoft spokesperson):

“Google is blocking our updated YouTube app for Windows Phone. We are working with them to resolve the issue.”

I asked Microsoft officials for more specifics as to what they need to change to meet Google's criteria. I also asked when Microsoft expected to have an updated YouTube app in the Windows Phone Store. Microsoft officials are not commenting.

In early May, Microsoft fielded a YouTube application that it built itself for Windows Phone 8. The problem: The app violated Google's terms of service by not serving ads and allowing video downloads. Google sent Microsoft a cease-and desist; Microsoft subsequently updated its app, ceasing video downloads but still not serving ads. in late May, Microsoft and Google said they were working together on a new YouTube app for Windows Phone that would comply with youTube's terms of service, including enabling ads.

Corporate politics at its worst...

Here are the questions I have after this latest dust-up. If Google and Microsoft were working together on this, how did things go so awry? If teaming fell apart, why? Did Microsoft balk at building an HTML5 app? (That seems unlikely given all the HTML/JavaScript love inside Microsoft these days.) In short: What the heck went wrong -- this time?

Update: Microsoft is now saying that its work with Google on this app ended because of Google requesting that Microsoft build the YouTube app in HTML5. Microsoft says that neither the iPhone nor Android YouTube apps are buillt in HTML5. So Microsoft decided to go ahead and publish a non-HTML5 version of its app in the Store this week.

"It seems to us that Google’s reasons for blocking our app are manufactured so that we can’t give our users the same experience Android and iPhone users are getting. The roadblocks Google has set up are impossible to overcome, and they know it," said Microsoft Corporate Vice President David Howard in Microsoft's blog post response.

I've asked Google for a response. Nothing back so far.