updated 11:00 pm EDT, Wed April 25, 2012
Search giant makes more money through iOS ads
In testimony that appeared to be crafted specifically to downplay any revenue generated by Android, Google's mobile head Andy Rubin told prosecutors in the ongoing trial with Oracle over Java licensing that the system exists mainly to "make it easier to access Google services" and that he did not expect the OS would contribute significantly to Google's ad revenues. While Google makes around $2.5 billion in mobile ad revenue every year, a substantial portion of that comes from iOS advertising rather than Android ads.
The remarks follows CEO Larry Page's assertion that he is "not sure" if Android was crucial to Google in recent years, again in an attempt by the company to undervalue the operating system as a hedge against the possibility of losing the lawsuit. Mobile advertising revenue makes up only a small portion of Google's overall income (around seven percent in 2011), but is still in the billions of dollars.
As part of the court proceeding, Google revealed for the first time some hard revenue figures that showed data from 2010. At that time, Google estimated that the company would make $278.1M in total revenue from Android, but only $158.9M from advertising and just $3.8M from app sales (the 30 percent royalty Google collects when an app is purchased). In slides shown in court, Google forecasted making $840.2M from Android mobile ads in 2021, and $35.9M in app sale commissions. One slide points to the latter numbers as a problem, or "lowlight" for Android.
The slides also offered wildly optimistic estimates for it's music, video and book services, with the company predicting it would do $738M in music revenue in 2011 and $1.5 billion this year. While true figures aren't known, the predictions have turned out to be wildly optimistic.
The projections and (then) future product plans paint a picture of a company that was hoping to use Android as a platform for diversification into other areas and eventually becoming somewhat less reliant on advertising, though it would clearly still be Google's core business. The company also badly over-predicted how successful it would be with Android tablets.