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Android has been a lifesaver for Google. If it didn't exist then phones would be in ecosystems from Apple, Blackberry, Microsoft, Nokia, Samsung, plus other up

Android has been a lifesaver for Google. If it didn't exist then phones would be in ecosystems from Apple, Blackberry, Microsoft, Nokia, Samsung, plus other up and comers. Each one of those would demand payment from Google for being the default search, maps, video etc. For example Google already pays Apple over a billion dollars a year to be the default search engine on iOS. Apple's change to its own maps resulted in Google losing over 30 million lucrative maps users (power of platform defaults). Being dependent exclusively on others for the success of your own business is insane. Having your own alternatives around (eg Android, Chrome) to keep everyone else "honest" is a very good strategy. Look at it another way - if Android was a non-Google company then Google would be paying them in the ballpark of a billion dollars a year. If Google can develop Android for less than that, then Android is profitable even if it has no direct revenues. User activity is the lifeblood for the Google business. It is what the revenues hang off, it is what improves existing products, it is what lets you measure what is actually going on, and it provides a ready place to introduce products and change existing ones.

coliveira 11y ago
This is a false dichotomy. Google has to pay to be in particular platforms because they're viewed as a competitor. Even nowadays Apple doesn't seem to have any interest in search technology. If Android didn't exist, Google could concentrate their efforts in being the known and trusted source for web search and partner with Apple and other companies, the same way this works for Facebook, Twitter, Yahoo, and so many other web-based companies.
- rogerbinns 11y ago
  > Even nowadays Apple doesn't seem to have any interest in search technology It is called Siri. Also Google isn't the only player in search, maps, video etc so competitors like Microsoft, Nokia, and Facebook could pay for placement. If Google was entirely dependent on other people's mobile platforms, then those platforms can make decisions based on payments, as well as on their competitive views such as not wanting to make Google stronger. The latter would harm Google's business and future prospects.
- brazzledazzle 11y ago
  When you don't own the platform you don't control the advertising. Facebook now competes with Youtube, even if there's not perfect overlap in the markets they target. Did Google+ fail? Certainly. But Facebook can leverage its way into things like competing with Youtube by using its existing user base. So just sitting around being the "best" at something doesn't mean squat. Your current partners might very well be your future competition when they see how much money there is to be made.
partiallypro 11y ago
I see what you are saying, however we have to look at the demographics and how that plays into ad sales for Google as well. People who buy Android phones are generally not the audience that advertisers want to hit. People who buy Apple products are generally middle to upper middle class individual with disposable income. Even in app sales this is apparent. I doubt Apple would have let them stand in for Apple's app advertising platform, but Siri? Maybe. Now Microsoft powers Siri, which has allowed them to do some data gathering for their own PA. Anyhow, I wasn't saying that Android is a lost cause for Google, just that it's incredible that it has yielded virtually (if none at all) profits. The biggest benefactor from Android has been Samsung and they have made it pretty clear they really really want (doesn't mean they can) swap out Android for Tizen. Every other Android OEMs are bleeding cash, even if Nokia had adopted Android it likely would have had to be sold eventually because of industry capitation in "dumb" phones. I think Google has sort of blown their golden opportunity with Android, it should be making them billions, instead it yields nothing. Google is an ad company first, but that's all they have. If I were an investor in Google, this would worry me. Maybe not for the next 10 years, but eventually. I think ad campaigns for millennials have become complex operations and just plane PPC and display won't cut it eventually.
- kumarm 11y ago
  >> People who buy Android phones are generally not the audience that advertisers want to hit You do know there are people outside US right?
  - rimantas 11y ago
    Yes, there are. The same applies.
- rogerbinns 11y ago
  There are approximately 1 billion Android users and half that amount of iOS users. If Google didn't own Android then other companies would have those billion users. Google would have to pay them for the user activity (if not outbid by someone else) and would be subject to their whims (eg Apple deciding to do their own maps). Google does not need to own every user, but does need to control some to keep the other players in check. As I mentioned, if Android costs less than a billion dollars a year to develop, then Google is ahead. It won't show up as a regular profit line, but they will be better off by the difference. It shows up in other ways too - Android gets Google's apps preinstalled. Defaults are extremely powerful as most users go with them. Google can essentially do whatever they want on Android. For example doing Google Now even required some changes to Android. A competitor platform would severely limit what could be done, and most platform owners would want that kind of functionality and knowledge of their users for themselves. Think of Android as sending pennies a day back to Google's products for each user. On other platforms, the platform owner gets first bite, controls Google's access, requires payment, and reduces what Google gets back. As for the Android OEMs, Google doesn't need them to succeed, and only that there is reasonable choice of devices available in the world. Heck it is actually in Google's interest for Android OEMs to just barely make it, as that means cheaper devices which means more users, and that those users have a bit more income left over to spend with Google. Google is making billions on Android. Without it their future would be very much in doubt.

coliveira 11y ago

This is a false dichotomy. Google has to pay to be in particular platforms because they're viewed as a competitor. Even nowadays Apple doesn't seem to have any interest in search technology. If Android didn't exist, Google could concentrate their efforts in being the known and trusted source for web search and partner with Apple and other companies, the same way this works for Facebook, Twitter, Yahoo, and so many other web-based companies.

rogerbinns 11y ago
> Even nowadays Apple doesn't seem to have any interest in search technology It is called Siri. Also Google isn't the only player in search, maps, video etc so competitors like Microsoft, Nokia, and Facebook could pay for placement. If Google was entirely dependent on other people's mobile platforms, then those platforms can make decisions based on payments, as well as on their competitive views such as not wanting to make Google stronger. The latter would harm Google's business and future prospects.
brazzledazzle 11y ago
When you don't own the platform you don't control the advertising. Facebook now competes with Youtube, even if there's not perfect overlap in the markets they target. Did Google+ fail? Certainly. But Facebook can leverage its way into things like competing with Youtube by using its existing user base. So just sitting around being the "best" at something doesn't mean squat. Your current partners might very well be your future competition when they see how much money there is to be made.

partiallypro 11y ago

I see what you are saying, however we have to look at the demographics and how that plays into ad sales for Google as well. People who buy Android phones are generally not the audience that advertisers want to hit. People who buy Apple products are generally middle to upper middle class individual with disposable income. Even in app sales this is apparent. I doubt Apple would have let them stand in for Apple's app advertising platform, but Siri? Maybe. Now Microsoft powers Siri, which has allowed them to do some data gathering for their own PA. Anyhow, I wasn't saying that Android is a lost cause for Google, just that it's incredible that it has yielded virtually (if none at all) profits. The biggest benefactor from Android has been Samsung and they have made it pretty clear they really really want (doesn't mean they can) swap out Android for Tizen. Every other Android OEMs are bleeding cash, even if Nokia had adopted Android it likely would have had to be sold eventually because of industry capitation in "dumb" phones. I think Google has sort of blown their golden opportunity with Android, it should be making them billions, instead it yields nothing. Google is an ad company first, but that's all they have. If I were an investor in Google, this would worry me. Maybe not for the next 10 years, but eventually. I think ad campaigns for millennials have become complex operations and just plane PPC and display won't cut it eventually.

kumarm 11y ago
>> People who buy Android phones are generally not the audience that advertisers want to hit You do know there are people outside US right?
- rimantas 11y ago
  Yes, there are. The same applies.
rogerbinns 11y ago
There are approximately 1 billion Android users and half that amount of iOS users. If Google didn't own Android then other companies would have those billion users. Google would have to pay them for the user activity (if not outbid by someone else) and would be subject to their whims (eg Apple deciding to do their own maps). Google does not need to own every user, but does need to control some to keep the other players in check. As I mentioned, if Android costs less than a billion dollars a year to develop, then Google is ahead. It won't show up as a regular profit line, but they will be better off by the difference. It shows up in other ways too - Android gets Google's apps preinstalled. Defaults are extremely powerful as most users go with them. Google can essentially do whatever they want on Android. For example doing Google Now even required some changes to Android. A competitor platform would severely limit what could be done, and most platform owners would want that kind of functionality and knowledge of their users for themselves. Think of Android as sending pennies a day back to Google's products for each user. On other platforms, the platform owner gets first bite, controls Google's access, requires payment, and reduces what Google gets back. As for the Android OEMs, Google doesn't need them to succeed, and only that there is reasonable choice of devices available in the world. Heck it is actually in Google's interest for Android OEMs to just barely make it, as that means cheaper devices which means more users, and that those users have a bit more income left over to spend with Google. Google is making billions on Android. Without it their future would be very much in doubt.