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AT&T Interactive has launched a new version of its popular YPMobile iPhone app. The new version will allow users to watch  video, and will support pay per call advertising.

The video capability will tap into AT&T’s growing library of SMB video across its own domain and on its YouTube channel. As we’ve argued, these can help qualify local purchase decisions in the IYP environment.

The same could happen in mobile as smartphone penetration (read: larger screens) continues to grow. Nielsen reports that 37 percent of iPhone users watch video on their phones — six times as likely as users of other mobile phones.

Pay-per-call advertising in the new version of the app will also be important. This is a logical direction for an AT&T mobile local search app and is the company’s first visible move toward monetization of its app. We’ll see more.

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