Google: Ad revenues already cover Android costs

Android is already pulling its weight with Google
Android is already pulling its weight with Google

When Google introduced the Android operating system a few years ago it said the goal was to bring the openness of the Internet to the mobile space. Yeah, that’s good and all but don’t forget that Google is trying to make some cash with that little, green robot.

In a Newsweek article, Google CEO Eric Schmidt said that Android already generates enough ad revenues to cover its costs. That’s not much of a surprise considering that Android is on a rocket ship to the moon – it’s already on 60 devices from more than 20 manufacturers and Schmidt previously said Android search traffic has tripled in the first half of this year alone.

All of those eyeballs and Android hands has Google salivating at revenue opportunities, as Schmidt has also said the service could eventually be worth $10 billion if the platform gets 1 billion users. Along with ads, Google plans to get in the business of selling content to its mobile users through the Android Market.

We know that Google Music should be coming to Android before too long and this will enable the search giant to sell music and multimedia content directly to consumers. Of course, we’ve also heard that the service is stumbling and the search giant has yet to sign a major record label.

Of course, we don’t know how much the legal fights are going to cost Google or its Android partners. The little green robot seems to have a target on its back as Oracle is suing the search giant over Java patents in the platform and key manufacturers like HTC and Motorola are facing patent complaints too.

The search giant is well-positioned for the explosion of smartphones, as its mobile search and mapping products are heavily used across a wide variety of platforms. We’re starting to see some strong competitors with Bing and Ovi Maps but I don’t think the search giant is losing any sleep at night just yet.

[Via Newsweek, Wired]

  • Paul

    I wonder why they can’t offer a cheaper phone, than? I remember reading once that Schmidt originally wanted the Nexus One to be a free/very cheap phone for consumers with development costs being covered by things like Adsense.. but things went haywire and they couldn’t work that out. Are they still planning on it? Frankly, the new android devices look promising, but I can’t justify paying $500 for a telephone.

  • Google doesn’t offer any phones at all, since they don’t manufacture any products. Even the Nexus One was an HTC built device.

    The main reasons you don’t see lower costs on Android phones is because their main developer toolkit is based on Java runtime, which is well known as a resource bottleneck. The slowest apps on most Symbian and WinMo devices were those made with Java, for reference.

    Also, they UI layer is rendered by the same processor as the applications, so the hardware needed to run Android is always higher end. You don’t see good Android devices running sub 700MHz processors because the experience suffers so greatly without the appropriate power.

    So if you want a low cost device, go with a platform that is more efficient on lower end hardware, such as Symbian.

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