Recently, Google had made it clear to Microsoft that the company needs to remove its YouTube app from the Windows Phone Store as it doesn't follow certain guidelines regarding to advertisement and the downloading of videos, which is deemed illegal. One would think Microsoft would take great care in such a sticky situation and remove the app. Instead, the app is still available in the store for download.

However, certain things have changed with Microsoft's YouTube app. A new update released by the company has removed the option to download videos, but the app still doesn't show Google ads. It is not yet certain how Google would respond to this, but from what we've learnt, the only way Microsoft can implement ads in the YouTube app is if Google gives the company access to key APIs, something Google has failed to do upon multiple request.

According to Microsoft in a statement to the Wired, "Microsoft updated the Windows Phone YouTube app to address the restricted video and offline video access concerns voiced by Google last week. We have been in contact with Google and continue to believe that our two companies can work together to hone an app that benefits our mutual customers, partners and content providers. We're earning new customers every day, with IDC reporting recently that Windows Phone posted the largest year-over-year gain among leading operating systems. We look forward to working with Google to maintain a great YouTube experience for the growing number of people who rely on both of our respective products."

Due to the fact Google has failed to give Microsoft the relevant APIs to kick off the ads on the YouTube app, and the removal of the download option, Google should have no grounds to stand on to request the app's removal. Microsoft is now in the clear; it's now up to the big G to make the next move.