
Why Google isn’t worried about Android revenue - acro
http://gigaom.com/mobile/why-google-isnt-worried-about-androids-revenue/
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technoslut
This article is seriously flawed.

>All Google ever hoped to do was provide a shell-shocked smartphone industry
with the tools to build a credible alternative to the iPhone that didn’t come
with Apple’s tight-fisted control.

This is wrong. The initial reason of why Android was even purchased was to
prevent Microsoft from becoming dominant in mobile. Whatever argument that is
made afterwards was historical revisionism.

>but its success has ensured that the world will have access to a modern
mobile operating system governed by different principles than Apple’s.

How can Krazit possibly know this? Android seemed to be a bigger reason why
WebOS and WP7 wasn't successful and, for a two year stretch, Android was
primarily capitalizing off declining marketshare numbers from competitors and
not Apple . It may have even killed off development of MeeGo.

>...and when Apple started making noise about barring AdMob from the iPhone,
the federal government raised an eyebrow.

Apple doesn't have to completely remove Google search completely from iOS to
hurt Google. All they have to do is remove them as the default option.

It's a bit absurd to imply that the only reason Google is in this to make sure
that one company won't control the future when this what Apple, Google and MS
all want. Google wouldn't have spent $12.5 billion on MMI if they weren't
expecting to make that money back and then some.

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ajross
_It's a bit absurd to imply that the only reason Google is in this to make
sure that one company won't control the future_

Seems like your thesis is that it's exactly the reason Google is in this. They
just got the company wrong.

I think this is a trap of trying to read moral content into factual data.
Saying that Google wasn't trying to become a dominant platform isn't the same
thing as saying they are saints for it. But I think it's broadly correct:
Google has always viewed its future as being the central arbitrage point for
online communication. Apple and MS mark success by unit shipments, and the
strategies for protecting those kinds of positions differ.

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bonzoesc
> Apple and MS mark success by unit shipments, and the strategies for
> protecting those kinds of positions differ.

Apple and MS mark success by the benjamins on their balance sheets, just like
HTC, Samsung, and RIM. If any of them could dip a Blackberry 6700 in Elmer's
glue, roll it around in a bin of diamonds, and reliably sell it to some Saudi
prince for $50 billion once per quarter, they would; but it turns out that
selling normal phones to normal people stacks cheddar more reliably.

~~~
ajross
No, that's oversimplified. Yes, all public corporations seek profit by
definition. But to claim that there isn't a significant cultural determiner
for the ways they do that is silly. ExxonMobil and ADM don't sell packaged
consumer products and probably never will. IBM does a ton of IT contract
business, where Nestle and Apple do none.

And, specific to this point: Google doesn't chase unit sales, they've made
their business in advertising, chasing eyeballs and traffic. Apple sells
hardware, and broadly wants to sell more hardware.

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greedo
Google sure loves to comment on the number of activations occurring on a daily
basis. This ties into both eyeballs and hardware sales of Android partners.

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tomelders
My pet theory is that Google can afford to dedicate large amounts of resources
to stuff like this, simply because there's no real competition to it's core
product, which is a combination of search, profiling and advertising.

I do however believe that Duck Duck Go is the only viable contender who could
realistically take on Google, not because their search is any better or worse
(something which can always be tweaked), but because privacy is becoming a hot
topic that non-techies are starting to wake up to.

I'm also reminded of when Google first started and the amount of developer
good-will it received, which I believe had a huge contribution to it's
success. I get the feeling Duck Duck Go has the same level of developer good
will behind it.

As I see it, Google's business model is so wrapped up in profiling and
tracking that it will be difficult for them respond to Duck Duck Go if it
gains any traction. At that point, Google may see a serious decline in it's
core revenue stream, and things like Android may not seem like such a good
idea.

Anyway, that's just my theory.

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coob
I would disagree that Google's core product is a combination. It's just
advertising.

Everything else leads to that: search, profiling, Chrome, Android, everything.

~~~
bad_user
You're confusing "product" with "revenue model".

Google's core product is advertising in the same way Microsoft's core product
is selling CDs.

~~~
coob
If you're giving it away for free, it's not a product.

The product is the advertising. It's the only significant thing they sell.

~~~
Kylekramer
Are NBC and New York Times advertising companies? Does that make Steve Carell
and Maureen Dowd advertisers? If you break it down by revenue, yes, but
clearly there is much more going on than "Google is an advertising company".

~~~
coob
NBC's customers are advertisers. The product they are selling is viewer's
eyeballs.

NYT is different as they are still selling a newspaper.

~~~
fpgeek
> NYT is different as they are still selling a newspaper

Not really. As I understand it, ads are where newspapers and magazines make
their money. The subscription fee is nice, but it is as much (or more) about
qualifying their readers for advertisers as it is for the income. Take a look
at the recent complaints about iOS magazine subscriptions including ads, for
example.

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tyree732
Google having Android guarantees a large percent of mobile searches go through
Google. It also means that Google has to pay Apple significantly less to be
the default search provider for the iPhone. If these were the only
accomplishments of Android, it would likely still be worth it for Google.

~~~
technoslut
The money that Google pays to Apple has to be all but meaningless. This is a
company who has $100 billion in the bank. What does $100 million mean to them?

>Google having Android guarantees a large percent of mobile searches go
through Google.

That may be true but what is it worth? From every survey I've seen, consumers
are using apps more for search than using browser search. Browser usage is
continually going down in the era of mobile apps.

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zyb09
I think the answer is simple: Revenue isn't the most important thing right
now. There are many things that make a successful company and revenue is only
one of them. Google makes enough money to pay their employees well, to make
investments and in generell more then enough to run its business, so making
more money isn't a priority. Apple has loads of cash and don't even know what
to do with it.

So instead they are pushing other goals, like increasing market share, binding
the users more to their services and essentially cement their position in the
mobile/web space.

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diwup
In case any of you find this article too long to read, here's the abstract,
_Google isn’t worried about Android revenue, because the market of Android is
growing_.

This article reminds me of writing papers when I was in grad school. It really
was a highly complicated (and demanded) skill to write so long an article
without making much sense.

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arebop
"All Google ever hoped to do was provide a shell-shocked smartphone industry
with the tools to build a credible alternative to the iPhone that didn’t come
with Apple’s tight-fisted control." Every other commenter has tried to tldr
this article and I think they've all got it wrong; this is the thesis
statement.

~~~
pastaking
… revenue Google has earned from Android since its launch in 2008: $550
million … [Google's] mobile revenue in general, which is on a $2.5 billion
annual pace driven mostly by mobile searches on iOS devices and in-app
advertising … Android was a defensive move on Google’s part, and one that
wasn’t primarily motivated by desire for revenue or profit. … Android
represents mobile competition

Quoted from the article, that pretty much sums it up.

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RandallBrown
Google makes money when people are simply browsing the Internet. That is why
Google invests in all things that will make people browse the Internet more.

It's the same reason they keep throwing money at Mozilla too.

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rbarooah
The quote from Vuc Gundotra in that article explains why they aren't worried.
Android isn't about direct revenue for Google. Its purpose is to damage
competitors who make money out of hardware or software by commoditizing the
mobile platform.

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loceng
The most important part of being a big company when competing with other big
companies is keeping mindshare. You need to stay relevant in people's minds.
Google owning Android does this in a subtle but powerful way. This is why RIM
is failing, or perhaps more so why there's a huge belief that RIM is failing -
which will only then. RIM used to be mentioned all the time with people
BBM'ing. They had a chance to continue to be relevant, though I am unsure if
that time has passed; I've not had the time to determine if they still have a
chance to recover and become dominant in people's minds again.

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eta_carinae
When the Android effort started at Google, neither Apple nor Microsoft were
remotely near to being a force in the mobile market (more like Nokia and RIM).

The target was much more obvious than that: the carriers.

Larry Page was tired of carriers dictating device models and data plans to
users, so he decided to do something about it.

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binarycheese
The page keeps crashing in Chrome

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funkah
Wait, Android boosters always point out that it was around before the iPhone's
release. Now we're saying it was created to keep Apple from controlling the
mobile industry? Hmmmmmmm.

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ConnorWGarvey
According to a comment from Eric Schmidt, Google makes enough money from
Android to pay for its development and more. Apple takes 50% of revenue from
ads shown on iOS devices. On Android, Google gets to keep 100%. Google can
afford to give its revenue from the Play Store (terrible name) to the wireless
carriers because it's making so much more money on ads than it does on iPhone
and iPad. Apple has made iOS so inhospitable for Google that it is more
financially advantageous for Google to maintain Android.

The idea that Google doesn't care about revenue is an interesting theory, but
totally wrong.

~~~
rsynnott
> Apple takes 50% of revenue from ads shown on iOS devices

Where are you getting that from? They take a 30% cut on iAd, but few apps use
that; for other networks, like Google AdMob, they get nothing.

~~~
ConnorWGarvey
They don't pay for ads directly. They pay for Google products to be placed on
the iPhone. The last estimate I saw was about 50% of total revenue. They pay
0% to place their products on an Android device.

