How much money does Google make from mobile?

How much money does Google make from mobile?

Summary: Two and a half billion reasons why Google loves mobile.

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TOPICS: Google, Mobility
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To hear some people (*cough* fanboys *cough*) talk about Android, you'd think it was an altruistic gift that Google bestowed on the world, getting nothing back in return other than endless love and affection from users.

Wrong!

Android is a vital component in Google plan to bring in the big dollars, and given the projected growth of both mobile devices and usage over the coming years, it's going to get a lot more important.

Google's financial figures from last Friday confirm this.

Google now has activated some 190 million Android devices worldwide. That's a big number, but a far bigger number is the $2,500,000,000 that mobile users are generating for Google yearly, a figure that's gone up 2.5 times over the past 12 months. And it's not hard to imagine this easily doubling to $5 billion over the next 12 months.

How is Google bringing in this cash? By doing what Google does best ... ads (and you thought I was going to say search, didn't you!). But Google can push ads all over the web without needing a device to do it. Where does Android, and specifically tablets and smartphones running Android, fit into this picture? Google CEO Larry Page tells us exactly how:

Generally I've found that high usage products will make a lot of money over time for well managed technology companies, and that's why it's so important to run these businesses for the long term.

High usage products such as smartphones and tablets. Oh yes. Microsoft CEO Steve Ballmer might not have been able to see the potential of Android, but Google did. You'd have thought that Microsoft of all companies would have understood the importance of controlling the platform.

Google doesn't charge a licensing fee for the Android OS, and doesn't keep a cut of the Android Market sales (70% goes to devs, with the remaining 30% split between the carriers and payment processors), but it does offer a great platform for shepherding users to Google properties where they can look at ads (while they do other stuff too, of course!). Then there are apps, which can also be home to ads thanks to Google's $750 million purchase of AdMob.

It's interesting to see how three different companies makes money from mobile. Google is interested in the ad revenue generated eyeballs and clicks, Apple is interested in selling the hardware at healthy profit margins, and Microsoft makes money from licensing.

Android is hugely important to Google and a big threat to Microsoft and it's Windows 8/Windows Phone plans (hence the squeeze the Redmond giant has been putting on Android ODMs, demanding fat royalty payments in exchange for patent infringement indemnity). These two companies are fighting for whatever scraps are left behind by Apple so expect the fighting (both in ads and in the courts) to escalate as the pool of potential users increases. The battlefield is going to get bloody.

Topics: Google, Mobility

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35 comments
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  • RE: How much money does Google make from mobile?

    I have always maintained they were not losing money on this platform! It was the Apple fan boys claiming they should ditch it because they weren't making anything!

    Guess what guys, Android isn't going anywhere and ignorant FUD will not stop it!
    slickjim
    • RE: How much money does Google make from mobile?

      @Peter Perry <br><br>Wrong.<br><br>It's Google who says they are not making anything, well at least in front of the Judge in the Oracle case.

      Of course Google are making money, user data is the product they manage and sell to advertisers.
      bannedagain
      • RE: How much money does Google make from mobile?

        @bannedagain
        mcthedog
    • Only Google fanboys think all this is from Android

      @Peter Perry

      iOS utilization is substantially higher on iOS than Android. This is leading to higher ad rates on iOS compared to Android (250,000,000 devices of high utilization trumps 190,000,000 of low utilization).

      What this means is Google still makes substantially more on iOS than Android. Recent studies are also showing that, while Android app download rates are accelerating, Android users are 1/20 as likely to actually pay for applications and in app purchases and content.

      Add to this the billions (what now 15,000,000,000) Google has sunk into Android and it is still looking like a financial looser.
      Bruizer
      • Just to back what Bruizer is saying.

        comScore's latest internet traffic usage result US only).

        http://www.comscore.com/Press_Events/Press_Releases/2011/10/Smartphones_and_Tablets_Drive_Nearly_7_Percent_of_Total_U.S._Digital_Traffic
        A Grain of Salt
      • RE: How much money does Google make from mobile?

        @Bruizer I am calling your bluff! It was you claiming they lost money for every copy used now you expect me to believe that Apple is a better ad company than the Google... Their earning show you're lying about that too.
        slickjim
      • RE: How much money does Google make from mobile?

        @A Grain Of Salt first of all what they're measuring has to be defined... Second, if the video format that Apple is using results in larger files then they will naturally consume more data!

        Also, that tells us how much data they used, not how they used it or what they used it on...

        As for Ad Revenue, sorry but more Ad supported Apps on Android means more Ads and more Money!
        slickjim
    • a smoke screen, the usual bs

      @Peter Perry
      google makes 2/3 of their mobile revenue from iOS devices (that's according their own eric schmidt at a congress hearing a few weeks ago) and some from windows phone and blackberry os. that leaves around 600-700 million in revenue from android devices (revenue, not profits). they have already invested a lot of money in developing android, a few hundred million, if not a billion already. there is no mathematical chance they will ever make any money from it. this whole endeavour was senseless. they would have made the money from mobile search anyway. and the revenue from the marketplace is in their "others" category which accounts for 3% of their overall revenue, marketplace probably a tiny bit of these 3%.

      why they did this just to get some meaningless "marketshare" and lose a lot of money in the process is beyond me. i am pretty sure google will soon regret they got greedy and turned against their former partner apple. siri is just the beginning. apple is hard at work making google obsolete on mobile devices. count on that.
      bannedfromzdnetagainandagain
      • RE: How much money does Google make from mobile?

        @bannedfromzdnetagainandagain
        mcthedog
  • RE: How much money does Google make from mobile?

    http://ppt.cc/9iT1
    zhmmii
  • So Google makes it'd M$ney off of adds

    So let's look at what an ad is? It's mind game designed (sometime with acrual psychological studies) to part one from one's money. So is playing with a persons mind in order to separate them from their money evil? As far as I'm concerned the ONLY exceptable advertising is when I actually and knowingly realize I need/want something and wish to find a range of products/suppliers to possibly fill this need/want. So all I need is a search engine. I do not need by trickery or other methods to be shown adds unless I specifically have a very real actual need that I am more than capable of shopping myself one I've defined my need/want. Thank you but no I don't need any help nor do I need to be played, nor trickedand yes that is evil. M
    James Quinn
    • RE: How much money does Google make from mobile?

      @James Quinn Not at all, Ad revenue is provided by companies and not end users so it is robbing from the rich and giving to the poor!
      slickjim
      • Better still....

        @Peter Perry ... Google is taking a fee from the rich in order to get their (The Rich's) collective hands in the poor's cookie jars and or piggy banks. Service fee if you will. Still a service it is.

        Pagan jim
        James Quinn
    • RE: How much money does Google make from mobile?

      @James Quinn You seem very anti-business.
      BIGELLOW
  • RE: How much money does Google make from mobile?

    Google is generating money through collection of personal data and through ads, something most see as a negative or annoyance on their devices and elsewhere. I'm already starting to get annoyed with sites that plays ads before I watch a vid. Google business model is one that is force fed onto the public. Here is this "free" Google service, all you have to do is give us you personal data to mine and sell to advertisers (free?). <br><br>Apple is generating money through their popular hardware that's tied to their popular and cool user friendly services. Consumers love it and as a result reward Apple with high 90% satisfactory ratings. Apple sees user loyalty. Repeat consumers. Word of mouth. Strong brand. Sounds like a model that's truly set for longevity.
    dave95.
    • RE: How much money does Google make from mobile?

      @dave95. Prove it! I have seen no evidence they are selling personal data of mine but you continue to spout this stuff without a shred of evidence... Furthermore, Facebook paid to have lies about Google doing such thing spread and any media company reporting such things should be weighed carefully with a grain of salt!
      slickjim
      • RE: How much money does Google make from mobile?

        @Peter Perry <br><br>Are you denying that Google sells user's personal data to third party advertisers? <br><br>This is what Google is telling users about privacy: "We dont collect or serve ads based on personally identifying information without your permission." Sounds great until you dig into that without you permission part. You will realize that all users of Google services are automatically opt-in to Google mining and selling your data to third party etc. That user must be savvy enough to <b>opt-out</b> of this wonderful services otherwise he/she is just giving permission to continue mining. <br><br><a href="http://www.google.com/privacy/privacy-policy.html" target="_blank" rel="nofollow">http://www.google.com/privacy/privacy-policy.html</a>
        dave95.
  • Wow AKH misses the boat again. Microsoft sees the entire picture.

    Yes MS makes money off licensing the WP os. Like app they also make money off app dev registration and a cut of apps sold in their marketplace. Like google they also make money of ads served via their in app ad control and they also use WP to stear users to MS properies (like Bing) for more ads. And of course they make money off non WP mobile like licensing the MS patents used in android and offering a fantastic Bing app for iPhone and iPad. Not to mention EAS etc. ANd yet to read AKH youd think they only get WP license revenue. Whats up with that?
    Johnny Vegas
    • RE: How much money does Google make from mobile?

      @Johnny Vegas Of course, Google showed them how easy it was to mak money this way and hey would have been fools not to follow!
      slickjim
  • RE: How much money does Google make from mobile?

    And some of that $2.5billion goes to Microsoft. That is awesome.
    LoverockDavidson_-24231404894599612871915491754222