The SDK will allow developers to integrate Google ads into their Windows Phone 7 apps. For the start, the beta version of the SDK will allow developers to include text and banner ads, with a number of post-click options associated.
Also stated on the official post:
In addition to the new beta Windows Phone 7 SDK, we’re also updating our existing iOS and Android SDKs. The new SDKs include enhanced HTML5 support for ad units that enable advertisers to create more engaging, richer ads and in turn, an improved user experience. We’re also now supporting full screen interstitial formats for tablets on iOS and Android.
Microsoft currently offers its own SDK for developers to monetize their apps. Google had bought AdMob, one of the largest mobile advertising platform, last year. Google’s new SDK will stand in competition with it. Which platform will be better for developers, is more a question of own choice and revenue stats.