Google has always been pretty cagey about the financials behind its Android mobile OS — and data that has emerged over the last week could give us an indication why: it’s been losing money from Day One.
In the lawsuit between Oracle and Google — in which Oracle claims Google, in its Android platform, infringes on copyrights and patents related to Java — a judge and jury are trying to work out what kind of damages might be awarded to Oracle. That case took a turn for the specific yesterday, when Judge William Alsup (as reported by Reuters) read out excerpts of Google documents that determined that the platform produced a net loss for every quarter of 2010 — and “a big loss for the whole year”.
He also noted that Android generated around $97.7 million in revenue in the first quarter of 2010.
The jury began their deliberations on Monday, and if they cannot come to a unanimous decision, then the trial will proceed to its second phase, concerning patents, with the first phase on copyright subsequently facing a retrial.
How much money Google has or hasn’t made is an important part of the case because it can be used to decide how much Oracle can potentially receive in damages if it wins the case — although Oracle contends that even if Android is making a loss, this should not have any bearing on the case.
Ironically, if Google can show it’s not making much money out of Android, then that may mean it has less liability. On the other hand, that difficult performance might also become a lever by which critics might begin to ask why Google is pursuing a business that is going nowhere financially.
Figures from Google documents from 2010 revealed earlier in the trial showed that Google expected a loss of $113 million in 2010 from Android and that it expected to have profits of $64 million in 2011; $248 million in 2012; and $548 in 2013. The vast majority of that revenue will be coming from advertising, with small but growing percentages also coming from app sales.
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps, YouTube, and Google+, the company’s extension into the social space. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing...
Android is a software platform for mobile devices based on the Linux operating system and developed by Google and the Open Handset Alliance. It allows developers to write managed code in Java that utilizes Google-developed software libraries, but does not support programs developed in native code. The unveiling of the Android platform on 5 November 2007 was announced with the founding of the Open Handset Alliance, a consortium of 34 hardware, software and telecom companies devoted to advancing open standards...