IMO I see it like this:
Microsoft: Please develop your apps for our platform?
Google: Shove your platform where the sun don't shine.
Microsoft: Ok then, we'll do it ourselves I guess...
Google: Wahhh Wahhh, no don't do that! Wahhh
Google should either shut up about Microsoft's app or suck it up and develop their apps for Windows Phone.
It's not like Google is some small startup that can't support WP because they don't have enough money or developers. They're just playing hard ball with Microsoft to spite them.
I think you are misunderstanding the situation... Google doesn't have to develop apps for competitors' operating systems, that is entirely up to the programmers of said system - or app developers that work within that ecosystem. It is not Google's responsibility to build specific programs for other companies to use. They may CHOOSE to at some point, if it benefits Google, but they are in no way required to do anything. Google has developed an open system that anyone can link into, provided they follow a few basic rules. This is an example of Microsoft blatantly trying to skirt around those rules, to make their video player app seem cooler.
Google hosts YouTube, and the advertising and viewing hits are what keeps the YouTube lights on - the costs of keeping millions of videos up and available for billions of views is not a trivial thing. Microsoft doesn't care what it costs Google in advertising impact, they just want something to make their phone more attractive. If they can't play by the rules, they should just spend untold billions to make their own version of YouTube, put a huge marketing push behind it to let people know it exists, link it with Bing, and then they can do whatever they want with it. Until then, they need to play by the rules of usage, just like everyone else is supposed to.
I don't think you understand what google has been doing to keep their apps off windows phone platform. Here is what google has done so far.
They removed EAS support from Gmail and forced windows users to use the crappy IMAP. They blamed Microsoft's proprietary EAS format and said CardDav and CarDal was open and Microsoft should support open platforms. Microsoft is complying but just a few weeks later Google announced they are dropping carddav in favor of a proprietary system.
Google limits windows phone proper use on Gmails mobile website. In order to get around this users had to spoof their phone as an iPhone, and then everything magically works. That's just a few lines of code google has to add.
The third party youtube apps didn't use googles youtube api for a very long time(not sure if they even do now) because they didn't have access. Metrotube(the most popular youtube app) has been broken many times as workarounds have been patched.
Google blocked Maps use from windows phone users.
Google has said they will not produce apps for WP as the market doesn't merit it. There is no monetary gain but, they want this app taking down stating monetary loss. They suggest users use m.youtube.com. The thing is the mobile site doesn't even have ads. They don't want this app on the platform as it doesn't play ads, they don't want to make an app that enables adds and they recommend you using an alternative that doesn't have ads. They gave Microsoft until when? The 22nd? If google adds ad services to the mobile site by then I'll shut up. I doubt they will though.
Google has stated that microsoft won't let them use their services siting proprietary reasons. Skype could be added to gmail, or atleast in the past. In the same breath,basically, google announced that they are dropping support for XMPP(which skype uses and is a standard) for their own proprietary standards.
Microsoft is no saint and both google and microsoft needs to stop their childish bickering, because us customers are the only ones losing. I never buy or sign up to Apple's services because I knew what I'd be getting into and I didn't like it. When I signed up for Gmail when it came out and youtube, I thought I knew what I was getting into. But boy was I wrong. I have no alternative to Gmail and Youtube but that should've been a good thing because those services are great. But now Google and Microsoft are comparing **** sizes and I may have to find something else to use. I don't like that at all.
It's been a long 3 years passive aggressive behavior back and forth, so I can't remember everything in this long road of waiting and asking for google apps/compliance. There is definitely more I'll edit if I remember.
This has nothing to do with markshare, apps, money or ads. They don't like each other for some unkown reason and customers are paying for it.