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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 ge

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.
- gress 11y ago
  You're right about Android being important as a way of blocking competition, but it's false to say they are making billions on Android. It's just like all the other free stuff they offer - it raises the bar for competitors, but it doesn't make them money. Saving money is not the same as making money.
  - rogerbinns 11y ago
    Using nice round made up numbers let's say that a Google ad is displayed and clicked on iOS. Google got paid 10c for the ad, but then had to pay Apple 5c to be the search engine. Same story on Android, except they didn't have to pay Apple, but did have to pay to develop Android (1c). In the iOS scenario they are left with 5c, but in the Android scenario they are left with 9c. They are better off in the final accounting by 4c because of Android. Call that whatever you want, but they end up with more money and more profits. The "free stuff" is not free. It is a place to deploy ads and encourage use of other Google services which then provides more places to deploy ads (aka revenue opportunities). Even if no ads are involved, the user activity is very valuable. Knowing what people search for, where they go, who they communicate with etc let Google make better products. For example when showing search results, which ones the users click on is monitored. If they keep clicking on the 3rd result then that one should likely be higher. The more traffic you get the better you can make your search results because the users tell you. Navigation data tells you what physical places are popular, which again reinforces the search results (eg Chinese restaurants in your town). Even seeing mis-spellings helps. If you ask people who have tried multiple search engines why they use Google, the answer is usually the quality of the results. It is a vicious cycle and why Google has 70-80% of search traffic. Guess where that makes the advertisers go, and the more advertising demand the higher the rates that can be charged. The positive feedback loops around Google really help. Android does not directly add to Google's bottom line. It does however add over a billion users to Google products, significantly reduces the costs to access those users, does not place those users under someone else's control, and helps the revenues of those Google products they use which does show up in the bottom line.
    - 11y ago

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.

gress 11y ago
You're right about Android being important as a way of blocking competition, but it's false to say they are making billions on Android. It's just like all the other free stuff they offer - it raises the bar for competitors, but it doesn't make them money. Saving money is not the same as making money.
- rogerbinns 11y ago
  Using nice round made up numbers let's say that a Google ad is displayed and clicked on iOS. Google got paid 10c for the ad, but then had to pay Apple 5c to be the search engine. Same story on Android, except they didn't have to pay Apple, but did have to pay to develop Android (1c). In the iOS scenario they are left with 5c, but in the Android scenario they are left with 9c. They are better off in the final accounting by 4c because of Android. Call that whatever you want, but they end up with more money and more profits. The "free stuff" is not free. It is a place to deploy ads and encourage use of other Google services which then provides more places to deploy ads (aka revenue opportunities). Even if no ads are involved, the user activity is very valuable. Knowing what people search for, where they go, who they communicate with etc let Google make better products. For example when showing search results, which ones the users click on is monitored. If they keep clicking on the 3rd result then that one should likely be higher. The more traffic you get the better you can make your search results because the users tell you. Navigation data tells you what physical places are popular, which again reinforces the search results (eg Chinese restaurants in your town). Even seeing mis-spellings helps. If you ask people who have tried multiple search engines why they use Google, the answer is usually the quality of the results. It is a vicious cycle and why Google has 70-80% of search traffic. Guess where that makes the advertisers go, and the more advertising demand the higher the rates that can be charged. The positive feedback loops around Google really help. Android does not directly add to Google's bottom line. It does however add over a billion users to Google products, significantly reduces the costs to access those users, does not place those users under someone else's control, and helps the revenues of those Google products they use which does show up in the bottom line.
  - 11y ago