Be Profitable For Google
At the announcement of Google’s first quarter earnings for 2012 most financial analysts were asking a question that has become all too familiar to book keepers at Google.
That was, this is cool but how are you going to make it pay?
While it’s true that Google netted a 10.8 billion quarterly profit, 29% more than was made the previous quarter people have started to ask exactly how Google will make money off the platform.
Android smartphones and Android tablets outnumber devices running every other OS in the US according to search ad network Chitika and around 250 million Android cell phones have been activated to date.
Android is so successful that Google is considering using it to get back into the China market based on the number of China cell phone and China tablet makers using the Android OS to power their devices.
But while Android might have the lion share of the MID and global smart phone market the company, and people watching it, are worried about how to make it pay.
While the company made around 2.5 billion US dollars from mobile search ads in the previous three months much of that came from other devices, around 1/3 came from apple devices and another ¼ came from devices with other operating systems.
There is talk of monetizing Android smart phones and Android tablets in other ways including the sale of Apps and licensing of other technologies and while a large number of apps are downloaded from the Android market most of them are downloaded for free.
The funny thing about Android is that comentators were asking the same question about YouTube only four or five years ago.
And while Google is still very secretive about the profitability (or otherwise) of YouTube one analyst estimated in September 2010 that Google would have made $700 million that year with Eric Schmitt admitting that they had started making money in 2011.
YouTube became profitable by becoming the biggest monkey in the online video zoo and increasing ad load and Google is likely to take the same path with Android.
And the best part about it, according to Google, is that it doesn’t need to.
Google purchased Android in 2005 because it saw the impact that smartphones and tablets would have on advertising and search and wanted to protect its investment.
By having Android spread onto a large number of smart phones and tablets from the least expensive China cell phone to the most expensive marquee smartphone like the Motorola Droid or Samsung Galaxy Google is ensuring that there will always be an operating system that it can control and be sure will display the ads they want it to display with as little interference from outside forces as possible.
This means that Android has already been more profitable for Google than many of their recent projects combined.
Johnathan Walker is a dedicated Google watcher and PR manager for iSourceChina.com China’s best source for smart phones and tablets.
Tablets at Computex 2012
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