
Google's Android Generates $31B Revenue, Oracle Says - bhewes
http://www.bloomberg.com/news/articles/2016-01-21/google-s-android-generates-31-billion-revenue-oracle-says-ijor8hvt
======
jimrandomh
This case is one that Groklaw used to cover, and... I have no idea what's
going on there anymore, and don't know where else to look for anything of
similar depth and trustworthiness.

Groklaw was a news site which covered tech company litigation, which shut down
in 2013 because the primary author, Pamela Jones, felt threatened by bulk
email collection.
([http://www.groklaw.net/article.php?story=20130818120421175](http://www.groklaw.net/article.php?story=20130818120421175))
Finding out that the old cases it covered are still going through appeals and
maneuverings, its absence is deeply felt.

~~~
saganus
I knew Growklaw shutdown some time ago, but never had the chance to read this
entry.

Wow. It's very dark.

It really made me think.

However... aside from that, and trying to shake down a bit of that darkness, I
read the update with Sheier's advice, and this stood out:

"Prefer symmetric cryptography over public-key cryptography. "

Why would that be? I've never actually read anything that would touch on the
subject. Does anyone have any references to why are these comments so? is it
that symmetric crypto can use larger keys? or is it because using an OTP makes
it unbreakabale?

------
repnation
Last 12M ending 9/30/2015 (last available financial data): Google did $71.7Bn
in revenue and $14.7Bn in net income. I assume the lawyer meant that Android
had generated $31Bn since inception, but that can't mean gross revenue since
they only take a 15% cut on the Play store (so wouldn't be able to show $22Bn
of profit (71% margin). So $31Bn in net revenue implies $207Bn in gross
revenues. The Apple App Store did $20Bn in 2015 and generated 75% more revenue
than Google ([http://blog.appannie.com/app-
annie-2015-retrospective/](http://blog.appannie.com/app-
annie-2015-retrospective/)), implying $11Bn in gross revenue for Google Play,
or $1.7Bn in net revenue in 2015.

tl;dr: Oracle lawyers are full of shit

~~~
bryanlarsen
You're not counting the license fees for the Android OS. Only Android AOSP is
free, and nobody outside of China ships that. Android including the Play Store
and all the Google apps costs real money, I've heard estimates of about $10
per phone. Android ships about 1 billion phones a year, so $31B lifetime
revenue sounds about right.

~~~
pfg
I've never heard of this before, and previous leaks of the contracts between
Google and OEMs[1] made no mention of this. I doubt OEMs would agree to those
terms. As far as I know, the license only covers things like hardware and
software requirements, apps you have to include (Google Play, Gmail, etc.),
etc.

[1]: [http://arstechnica.com/gadgets/2014/02/new-android-oem-
licen...](http://arstechnica.com/gadgets/2014/02/new-android-oem-licensing-
terms-leak-open-comes-with-restrictions/)

~~~
zurn
Techically the money OEMs have to pay covering certification does not go to
Google.

You may be right that most vendors don't agree to it. But the larger ones that
are on the western markets definitely do.

[http://www.theguardian.com/technology/2014/jan/23/how-
google...](http://www.theguardian.com/technology/2014/jan/23/how-google-
controls-androids-open-source)

~~~
pfg
> Techically the money OEMS have to pay covering certification does not go to
> Google.

OP was referring to license fees, which google does not charge. Mandatory
certification by a third party is different from that, and judging by the
numbers in that article amount to less than a dollar per device (probably far
less for flagship devices that sell millions of units?).

> You may be right that most OEMs don't agree to it. But the larger ones that
> are on the western markets definitely do.

No OEM agreed to licensing fees, they don't exist (as far as is publicly
known).

------
wh-uws
And it all could have been avoided with a measly (for Google) 4 billion dollar
Sun acquisition on Google's part years ago.

I honestly still dont understand why they didn't.

I ask this question with zero snark intended. Can someone please give me a
good answer why Google didnt buy Sun?

~~~
tadfisher
I believe Google has yet to spend 4 billion dollars in this litigation matter,
so they're still ahead regardless?

~~~
rdl
SUNW would have brought with it other value, not just the patent portfolio.

~~~
sangnoir
I doubt Google had any plans to sell big iron.

------
fataliss
I think it's the wrong language to say that Android generates revenue, as
really it's ads and app store that do. Android just enables those activities.
It's like saying that iOS generates revenue. It doesn't. It would if it was
commercially licensed software, but Android OS isn't as far as I know. Maybe
I'm just being persnickety.

~~~
badestrand
So Facebook generates no revenue as well since it's just their ads that do? In
both cases the platform (Android/Facebook) is the vehicle, whose sole purpose
is to generate revenue, so I think it is safe to say that that vehicle is
directly responsible for the revenue.

~~~
dekhn
The Facebook social media desktop and web applications don't directly make
money (unless there is some enterprise hosted version of Facebook). So, sure,
it's the Facebook Ads product that makes the money.

~~~
darkstar999
That's like saying a magazine doesn't generate revenue, the ads do. It doesn't
really make sense. The ads won't exist without the platform, therefore the
platform generates revenue.

~~~
gwright
Except that if Android didn't exist, those users would be using another phone
that was serving Google ads (as opposed to not having a phone).

A better analogy might be television. If a company such as GE produced TVs and
also owned a television network (NBC), then selling TVs so people could watch
NBC would generate ad revenue but if someone replaces their GE television with
a Sony TV, NBC still makes money selling advertisements.

I'm not sure I would describe the television equipment business as the entity
generating revenue.

In the Google ad world, it is the ad-network that is generating the revenue,
not the phones/tablets/computers that are rendering the ads.

That isn't to say that Google isn't getting revenue from Android, just that it
would be odd to attribute the ad-revenue to the device business.

~~~
dogma1138
No they would be using a phone that serves some ads. Google makes money
directly from Google play and from having Google Ads as an integrated part of
the platform this is a big big difference.

If Google didn't had android they could not access the same revenue stream if
there was an alternative OS the only thing they could do is either generate
revenue via regular browsing.

Your TV analogy is incorrect because in your case these ads are platform
agnostic, a correct analogy would be GE selling smart TV's that allow NBC to
display ads outside of it's regular TV broadcasting (which anyone who owns an
LG TV knows just how annoying the fuck it is) in this case this capability is
platform specific meaning NBC can only display these types of ads on GE smart
TV's if some one has a Sony TV NBC can't display these ads hence NBC can't
make money on selling those specific advertisements.

~~~
5ersi
Google Ads are not an integrated part of any Android OS. Google Play Store is
available on most western Android phones but is not part of an OS - see Amazon
Kindle and most Chinese phones.

Google ads are delivered either via web pages or as ads in apps. In both cases
the owner of the page/app decides which ad network they'll use. There is
plenty of competition in ads space.

The situation is the same on iOS, where Google has no leverage, yet they have
the same revenue stream from ads.

The only advantage Google has is the default search engine setting on official
Google Android phones.

SO you

------
azurezyq
I'm curious should lawyers have financial or other types of liabilities of
intentionally / unintentionally disclosures like this?

------
colinbartlett
Maybe I just don't understand the nature of financial data, but what makes
this so sensitive? What could someone do knowing this number that could have
such a dramatic effect on Google's business?

~~~
ocdtrekkie
Google heavily relies on a perception that Android is practically a charity
for the good of the world, wholly open source, etc. The reality that it's a
walled garden ecosystem that makes bank isn't really good for them.

And a lot of OEMs have reason to ask why they're expected to pay the burden of
liability and work on software updates and security patches when Google's
raking in most of the profits.

~~~
victorhooi
Yeah....haha....

Developing a mobile OS isn't cheap.

The only viable competitor to Android at the moment seems to be iOS. You could
go ask Apple how much money they've ploughed into iOS development. It's
probably more money than either you or I have seen in our lives before.

Look at what happens when hardware manufacturers try to develop their own OS -
e.g. Samsung's
[https://en.wikipedia.org/wiki/Bada](https://en.wikipedia.org/wiki/Bada)

Or even when they try to create basic skins....

The fact of the matter is, they (OEMs) are getting something they historically
haven't been able to get right - and if they don't like it, they are free to
fork it. E.g. look at Amazon, and their Fire range. (The problem being that
now they've forked, they don't get upstream updates, and have to take on the
maintenance burden themselves....)

So I have very little sympathy for them - they're getting a pretty good deal.
The alternative would be everybody using iPhones or Blackberries...haha.

This is just my take on it, of course =).

~~~
ocdtrekkie
The reason Android is the only viable competitor is because they're an illegal
monopoly, and they're under investigation for it in several countries.

Hardware manufacturers would be better off with their own platform than
forking Android. Because Android's built that way. Between proprietary APIs
apps are built on, and Google having a chokehold over the primary distribution
channel for apps, forking leaves a manufacturer with almost nothing to go on.
The only thing they gain is a loss: They don't control the development
direction of the platform.

Meanwhile, OEMs have to bear the cost of deploying software updates, even if
they're to fix Google's security mistakes. When Stagefright went out, any of
the few devices that got patched, that cost the OEMs money. Why isn't Google
paying the burden of all of that development and deployment? It's their screw
up! OEMs signed a deal with the devil on Android, and now they're in a
situation where they have no way to escape. Dropping Android means financial
ruin, but sticking with it means they can't do anything without Google's
approval.

~~~
bitmapbrother
You must be referring to the antitrust charges that companies like Microsoft
and their allies petitioned the EU to look into.

I would also love to see hardware manufactures use their own platform because
it would make them realize how incompetent they are at writing software and
creating ecosystems. It would also eliminate them from the market as no one
would buy a phone with such poor quality software and the lack of app
availability.

As for OEM's having to bear the cost of deploying software updates, well, if
these OEM's weren't so insistent of rolling their own Android OS, complete
with their nasty UI changes, (in an effort to trick their customers that they
actually created the OS from scratch) and simply shipped Google's version then
the cost of deploying the updates would be much less. Additionally, I don't
get why you think Google is on the hook for an OEM's OS. They created the OS
by customizing it so they're responsible for it. But, let's face reality,
these OEM's would prefer shipping a brand new phone rather than issuing
updates because it's in their nature to make as much money off of their
hardware and OS updates just prolong their support and detract from future
sales.

------
daveguy
You have to pay Oracle to develop Java apps? That is news to me. I thought the
idea was to offer the JDK for free to spur adoption. Is that only the JRE?
Does the same "no-commerce without paying Oracle" apply to JavaScript or
Node.js?

~~~
0x4a6f6579
When using Java, use is subject to Oracle Binary Code License Agreement
([http://www.oracle.com/technetwork/java/javase/terms/license/...](http://www.oracle.com/technetwork/java/javase/terms/license/index.html)).
In this license use and distribution of the JRE & JDK are granted except for a
few particular situations, outlined in various sections of the license.

Simply the act of "develop[ing] Java apps" falls entirely within a fair
interpretation of the license. The difference is best understood in the
Solicitor General's Brief (pg. 5 [http://www.scribd.com/doc/266703948/Goog-v-
Oracle-Solicitor-...](http://www.scribd.com/doc/266703948/Goog-v-Oracle-
Solicitor-General-Brief-Copy)):

 _Although a Java programmer is free to write new code from scratch without
relying on prewritten methods, the Java Standard Library provides convenient
building blocks for writing computer programs._

 _Although respondent [Oracle] does not claim a copyright interest in the Java
language itself, respondent owns a copyright in the Java Standard Library. Pet
App. 7. Respondent makes the Java Standard Library available to computer
programmers under any of three copyright licenses, including a conditional
royalty-free license. See id. at 7-8._

On page 7: _Petitioner [Google] assets that it copied the declaring code so
that programmers familiar with the Java platform would be able to switch over
to the Android platform without having to learn entirely new commands for
invoking commonly used methods._

 _In total, petitioner copied approximately 7000 lines of declaring code._

Herein lies the core issue -- Google did not have a prearranged license
agreement to copy the declaring code of Java's standard library, and in doing
so infringed on the copyright by using it in their own platform.

Section F of the Oracle Binary Code License reads _JAVA TECHNOLOGY
RESTRICTIONS. You may not create, modify, or change the behavior of, or
authorize your licensees to create, modify, or change the behavior of,
classes, interfaces, or subpackages that are in any way identified as "java",
"javax", "sun", “oracle” or similar convention as specified by Oracle in any
naming convention designation._

tldr; Consider a painting created by an artist. A photographer comes along and
thinks, "great painting!" and snaps a photo. If the photographer goes on to
distribute and replicate the photograph of this painting (without an agreement
with the artist) and earns a profit, the photographer has infringed on the
artist's copyright.

~~~
mjevans
An API is not a painting. It is a set of facts.

~~~
0x4a6f6579
It is true an API is not a painting, but this is not a claim I made. The API
specified in these legal matters is work product created on behalf of a legal
entity who has a claim to its copyright that is legally filed and maintained.
Both Google and Oracle agree on that _fact_ according to the document I
linked. If you still disagree, take it up with those parties.

~~~
lsaferite
Seems more like the photographer saw the painting, found the composition
pleasing, then recreated that composition in real life for a photo.

------
RickHull
It seems like Oracle's reasoning could also be used to gauge how much revenue
lithium-ion batteries generate for Google.

------
spinchange
I don't have any special insight or knowledge, but there's absolutely no way
Oracle's numbers are right. It is in their interest to exaggerate and take the
most ridiculously optimistic estimate. In actual fact, I bet Google (again
just my rank speculation) probably sees Android as a loss leader. Doesn't
Microsoft make more per device on Android than Google through IP licensing
shakedown settlements? I know Android enables a lot of things, but does Google
really earn much (or any) revenue from it directly?

------
datashovel
I seriously can't wait for Oracle stock to crash so Google can just buy them
outright. First order of business: Fire the legal department.

------
kriro
I think the lawsuit is ridiculous but from reading that article it feels like
Oracle has a decent case if all that matters is convincing a judge.

The space race argument and the revenue figures sound like a good enough
simplistic argument to score a decent settlement (imo). I hope Google
hardballs this but I have a feeling they won't.

------
IBM
This is amazingly low considering that they have 80% of global market share of
an incredibly large and fast growing product that almost everyone in the world
will own.

~~~
mwfunk
Samsung (and Google, to a much lesser degree) are the only companies that make
any profit on Android. Everyone else loses money on it, even if they have
billions in revenue. "Lose money on every sale, but make it up in volume"
isn't a viable business strategy, but that's where a lot of companies are at
right now.

~~~
tim333
Microsoft makes ~$2bn/year from it.

~~~
Aeolun
How does MS make money from Android? App sales?

~~~
rtkwe
Patent licensing fees. Microsoft holds a number of patents that they developed
or purchased like exFAT and Exchange ActiveSync that are in every Android
device made recently.

[http://arstechnica.com/tech-policy/2014/06/chinese-govt-
reve...](http://arstechnica.com/tech-policy/2014/06/chinese-govt-reveals-
microsofts-secret-list-of-android-killer-patents/)

------
salmonet
This turned out to be a very wise $50 MM acquisition on google's part

~~~
bitmapbrother
Yes, but in retrospect Google would have gotten into the game one way or
another. If not Android it would have either been their own in-house solution
or even WebOS.

------
aaronkrolik
has anyone been able to recover the now removed document?

------
beedogs
Oracle really is a slimy, terrible company, though.

------
jorgecurio
Larry Ellison is a joke. Oracle is slowly fading into mediocrity. He thought
ERP was just a bunch of tables and UI that corporate america would be suckered
into paying millions of dollars for.

~~~
ryanmarsh
They were and they did, now the guy races 72' catamarans around SF Bay for
fun. I'd say his bet worked out just fine for him.

~~~
jsprogrammer
And someone won $1.5 billion on lotto numbers...

~~~
ryanmarsh
"If it's stupid but it works, it isn't stupid" \- Murphy's Laws of War

