3 ms·

Hrm. The number quoted doesn't sound interesting because it sounds fake. $1 billion dollars sounds like something Dr. Evil would say, not a real figure that got

by kaptain 16y ago

Hrm. The number quoted doesn't sound interesting because it sounds fake. $1 billion dollars sounds like something Dr. Evil would say, not a real figure that got worked out in some SEC filing. I like how you broke down the different categories for search revenue related to mobile though. Let's put some phony amounts on them just for fun. Let's begin with the assumption that Google gets $1 per mobile search. (I'm using mobile search here because that's the category of search we are interested in.) That is, every mobile search, on average, generates $1 in revenue. 1) Mobile searches which were made on Android but where, if Android hadn't ever existed, the user would have had another mobile device and made the same search anyway. Google loses money here because the search would have been made anyway. The loss comes from developing Android. Let's say Google loses 10 cents. (Total BS number!) 2) Mobile searches which were made on Android where, if Android didn't exist, the user wouldn't own a smart phone and the search would never have happened. Google earns $0.9 here because they had to develop Android, but making $0.9 is better than making $0. 3) Mobile searches which weren't made on Android. I feel like this goes in the same category as 1) because these are mobile searches that would have been made anyways, regardless of the existence of Android. The only difference is that in case 1) the search was made on Android. But for the purpose of justifying the existence of Android, they are one and the same. So Google loses 10 cents here because the would have gotten this search if they had done nothing. Clearly Google needs category 2) to be as big as possible in order to justify the existence of Android. So the whole thing boils down to: "If Android didn't exist, the user wouldn't buy a smartphone to do mobile search". I feel that if Android didn't exist, users would go out and buy an iPhone or something similar. I don't think the phone manufacturers would have just let Apple run away with the smartphone market so it would be in their best interest to create something competitive. But the bottom line is that Android seems like a needless expense for Google.

Tyrannosaurs 16y ago
Fake numbers are often the most interesting sort, that's why we need to look at them closely. $1bn dollars in revenue isn't that big a deal for a company like Google, the question is what are the associated costs and what's the resulting profit. Many a company has come a cropper thinking about revenue when they should be thinking about profit. >> 1) Mobile searches which were made on Android but where, if Android hadn't ever existed, the user would >> have had another mobile device and made the same search anyway. > Google loses money here because the search would have been made anyway. The loss comes from developing > Android. Let's say Google loses 10 cents. (Total BS number!) For non-Android OSes, Google pay Apple (or whoever) to run with Google as the default search engine. In essence they're sharing the revenue for these searches if they're not run on Android which is why they're more profitable because Android exists so they do "make" money rather than lose it. In this category Android is best seen as a mechanism for cost control - it doesn't increase their revenue but it does reduce their outgoings. > 3) Mobile searches which weren't made on Android. > I feel like this goes in the same category I agree this is the hardest category to justify and part of me agrees with you. The only thing that gives me pause is (a) Google and it's partners have thrown a lot of money into advertising and PR which will likely have had some impact on public uptake of smartphones and (b) Android has bought smartphones in at lower price points which simple economics tell us will have expanded the market - you can get a decent Android handset in the UK for free on a contract, the iPhone 4 kicks off at over £300 on the same monthly deal. > I feel that if Android didn't exist, users would go out and buy an iPhone or something similar. I don't think the > phone manufacturers would have just let Apple run away with the smartphone market so it would be in their best > interest to create something competitive. But the bottom line is that Android seems like a needless expense for > Google. I think that's easy to assert but the attempts of RIM, Nokia, Palm, Microsoft and others don't really back it up. RIM has a place for sure but it's not directly in the iPhone space. The others have all tried and produced offerings which are either technically or commercially not in the same ballpark as Apple are managing. What makes you think any of them (or someone else - Samsung? HTC? Morotola? Sony-Ericson? Not exactly go to companies for great software experiences) would be capable of competing? Frankly Android is the only mobile OS going toe to toe with Apple with any level of success.

by kaptain 16y ago

Tyrannosaurs 16y ago

Fake numbers are often the most interesting sort, that's why we need to look at them closely. $1bn dollars in revenue isn't that big a deal for a company like Google, the question is what are the associated costs and what's the resulting profit. Many a company has come a cropper thinking about revenue when they should be thinking about profit. >> 1) Mobile searches which were made on Android but where, if Android hadn't ever existed, the user would >> have had another mobile device and made the same search anyway. > Google loses money here because the search would have been made anyway. The loss comes from developing > Android. Let's say Google loses 10 cents. (Total BS number!) For non-Android OSes, Google pay Apple (or whoever) to run with Google as the default search engine. In essence they're sharing the revenue for these searches if they're not run on Android which is why they're more profitable because Android exists so they do "make" money rather than lose it. In this category Android is best seen as a mechanism for cost control - it doesn't increase their revenue but it does reduce their outgoings. > 3) Mobile searches which weren't made on Android. > I feel like this goes in the same category I agree this is the hardest category to justify and part of me agrees with you. The only thing that gives me pause is (a) Google and it's partners have thrown a lot of money into advertising and PR which will likely have had some impact on public uptake of smartphones and (b) Android has bought smartphones in at lower price points which simple economics tell us will have expanded the market - you can get a decent Android handset in the UK for free on a contract, the iPhone 4 kicks off at over £300 on the same monthly deal. > I feel that if Android didn't exist, users would go out and buy an iPhone or something similar. I don't think the > phone manufacturers would have just let Apple run away with the smartphone market so it would be in their best > interest to create something competitive. But the bottom line is that Android seems like a needless expense for > Google. I think that's easy to assert but the attempts of RIM, Nokia, Palm, Microsoft and others don't really back it up. RIM has a place for sure but it's not directly in the iPhone space. The others have all tried and produced offerings which are either technically or commercially not in the same ballpark as Apple are managing. What makes you think any of them (or someone else - Samsung? HTC? Morotola? Sony-Ericson? Not exactly go to companies for great software experiences) would be capable of competing? Frankly Android is the only mobile OS going toe to toe with Apple with any level of success.