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Should Google Get Aggressive About Monetizing Android?
Nerval's Lobster writes "Google's core search-advertising business is slowing down (despite an uptick in revenue and earnings for the most recent quarter) and a new report suggests that advertising ROI is much higher on iOS than Android. In light of that, it's worth asking whether Google, having dominated much of the mobile-device market with Android, will ever get around to more aggressively monetizing its mobile operating system, and what that could mean to the manufacturers that have been loading the software for free onto their hardware. If Google started charging licensing fees to manufacturers, and attempted to clamp down so that Google Play served as the only hub for Android apps (something that would definitely put it on a collision course with Amazon, which boasts its own Android app store), would it be shooting itself in the foot? Or would the rest of the ecosystem respond in a muted way, considering the sheer size of Google's power and presence?"
They're too busy drinking Vic's koolaid to worry about anything else actually important. They don't care about the user anymore it's whatever Vic says to try to be like Facebook - when no one even cares.
Are we asking whether Google should commit the same enormous Open Source/GPL faux pas that Oracle committed with MySQL?
Seeing as Google is actively dumping MySQL for that very reason, I'd say, "No!"
We should learn what we need to know about issues, before we decide what we need to feel about them.
Check out the ads they are placing into the default gmail app. They will slowly add them to all bundled google services on Android.
a new report suggests that advertising ROI is much higher on iOS than Android.
That Facebook advertising ROI is much higher on iOS than Android.
It's too late for them to even try to monetize Android as attempting to charge for it will just drive their hardware partners down the same path as Amazon or towards other platforms like Ubuntu, Firefox OS, Windows Phone, Tizen, etc. That would be bad for Google as it might mean that fewer people use their services, which means fewer ad views, which means less revenue. I can't imagine that some of their hardware partners are overly thrilled that they've started selling Nexus devices at close to cost and have further eroded their profit margins, so some might be fine with testing other waters if Google wanted to start charging for the OS.
Google's ROI on advertising on its products will perennially be lower on iOS than Android, simply because on Android they have OS development costs to factor in, whereas on iOS (and other products) they do not.
If you look at the progressive development of Google Play, I'd say they are monetising Android quite well already.
It would never work out at this point.
I'd like to see the whole smartphone (and Android ecosystem) move towards being like PC's. A blank platform where you choose which OS to install, and where some cost and some don't.
CyanogenMod is great, but it requires quite a bit technical skills to properly install and configure it. Still a step in the right direction, IMHO.
History is ripe with companies that built a product that does something different, and in ways better, than the competition. And once their product is successful, they try to emulate something that somebody else does, and their product share slowly declines as their users realize there is no longer anything special about the product.
Look at Firefox. It was a faster, lighter, less annoying and extensible browser. Over time, it slowly got bulkier, slower, and in some ways buggier. They annoy users by panicing any time a certificate is signed by an authority not on the list. When Google released Chrome, Firefox decided they wanted to have a Chrome-like super fast release cycle, which hurt extensions. Users are slowly leaving Firefox for other browsers, especially Chrome, as Firefox becomes less and less special.
If Google locks down the OS and prevents users from installing their own applications, then Android will no longer be special. People will still use it, since it's still a smart phone and devices will be cheaper than Apple. But as soon as a competitor comes along that offers what Google used to offer, users will quickly leave, and within several years Android will be a memory.
This is the ultimate objective of Google+, reducing the number of independant blogs and websites with G+ blogs and pages so keep margins high. With less independent bloggers and websites, ad revenue for these pages will shrink, and Google makes more money.
It is also why people like Mike Elgan and Robert Scoble shill the fuck out of everything Google does, because they know which way the wind is blowing. They are both full of shit, but they didn't get to where they are by not playing well with the big dogs. In return they get free shit from people, web hits and paid speaking gigs, and get to pretend like they are important.
I liked Google much more before they became scumbags like Facebook. Now you can't login to Gmail without it wanting you to create a Google plus account, want your phone number and other contact details. This behaviour along with sharing the email and contact lists to the NSA, getting caught lying about it, now trying to act like a good guy and lobby congress to protect privacy. If Google cared so much about users' privacy they would have lobbied before the Snowden leak.
Android is just Linux + mobile UI + Java. If Google were to charge manufacturers for Android OS, shouldn't Oracle be within its rights to charge for Java on Android?
Google should cease all activities and ask for forgiveness.
My dad complains about ads getting in his way so he can't do anything on his phone. My AOSP build can't install google apps so I can't buy from the store.
So casual users and hardcore users getting screwed.
Android phones aren't much different from iPhone except you can go outside the walled garden, which means you developers will be able to sell their apps even if they compete with "official" offerings. You can disable updates. Etc.
Android with AOSP is WONDERFUL, with it broken... I'm waiting for the Ubuntu phone.
...Microsoft will have more than a snowball's chance in Hell of getting more marketshare with their mobile OS. There is such a thing as eating your seed corn, and monetizing Android would be exactly that. Yeah, they'd get a few million bucks for this quarter at the expense of advertising revenue and marketshare. And they would be lucky to break even on earnings and then lose in the long run.
--
BMO
Android is popular because any manufacturer can make a fully functional phone for very little development cost. Free is a strength, not a weakness. Microsoft has a closed proprietary phone and it isn't doing well at all. A closed source Android would fare just as well. A free platform is just that, a platform. It's up to the manufacturer to launch a profitable business either under or over Android. Under meaning the hardware and over being services provided by the platform. It is a win-win proposition for everyone and that is why it does so well.
They sell you. At least information about everything you do.
Google's ROI on advertising on its products will perennially be lower on iOS than Android, simply because on Android they have OS development costs to factor in
And this will lead you to understand exactly how Google intends to increase ROI. If you can't get more clicks, you can adjust the other factor decreasing ROI downward...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
yes. it is absurd that they are losing money with an os that effectively lets the world compete directly with apple without paying murrica a licensing fee.
The title of the first FA is:
Google earnings beat estimates, but Motorola losses keep growing
The second FA is strictly about Facebook ads. It says:
One caveat that Slagen offered, however, is that the data changes with industry, and that gaming and e-commerce industries, for instance, did not see the same kind of massive iPhone/Android gulf in ROI.
The summary stinks of typical anti-Google FUD.
Google beat earnings estimates. Google's Android OS drastically beat expectations on how soon it would totally dominate the smartphone market. So some asshat suggests that these results mean Google is doing poorly and it is only a matter of time before Google joins Apple and Microsoft (and others) by turning to the dark side.
Having a dominate market share in the smart phone sector is HUGE. Google's plan for Android was to make sure they would not get shut out of the smart phone ads business. The plan far exceeded expectations all around.
We don't see the world as it is, we see it as we are.
-- Anais Nin
Good I knew you could.
Come on people.. If Google cracks down like that do you really think that a company like Samsung and other Android device behemoths would not simple take the OpenSource source code - fork-o-ramma .. and carry on sans fees ?
The only plan that would not lead to forking is Google leveraging their own apps and services better for the Android platform.
Stick a fork in it - this post is done
Google stock hits a record on its quarterly results...Jumping 8% in after hour trading. Its ad revenue despite what the article implies grew 17% year-over-year. That is up from its 15% growth in the second quarter.
But the reality is Googles growth is in "Other" revenue; which grew 85% thanks to sale of Apps...sound like they are monetizing Android even without advertising.
Graph showing revenue by revenue source http://b-i.forbesimg.com/roberthof/files/2013/10/Screen-shot-2013-10-17-at-1.45.11-PM.png
Which is better, $100 a year for 50 years or $500 right now and $0 for the the next 50 years? I guess if you are most of corporate America, it is the second one.
If you are not allowed to question your government then the government has answered your question.
Why is it that in 2013 the majority of discussions about generating revenue using a free/libre/open source strategy are still focused on "clamping down" and other zero-sum game thought patterns? Haven't we shown yet that there are not only strategies to generate revenue with open source that don't involve trying to control everything, but also that these strategies can be more successful in the long run? The type of "collision course" competition that the OP mentions is strategy thinking from the 70s and 80s. We're past that. We can do better.
I think a more interesting question to ask is: "How can Google generate revenue from Android while continuing to nurture the ecosystem and helping other stakeholders also continue to benefit from its success?". Facing challenging questions and trying to solve them is far more interesting than simply assuming that there is no solution, especially when anecdoctal evidence suggests otherwise.
Disclaimer: I'm doing my doctoral research in strategic management in the area of open source strategy, so my perspective is necessarily biased. Some of my work can be found at http://osstrategy.org/
and now Apple has seemingly walked away with the mindshare of the educated & upscale side of the country.
May their chains set lightly upon them.
Most android users (all except the "lusers") use my HOSTS file to block advertisements
You need root to edit hosts on Android. And if you define "lusers" as Android users without root, I suspect they greatly outnumber Android users with root.
Devices running iOS sell at a premium, to people who don't mind paying more for goods they consider superior. Of course people with extra money will be able to buy more advertised products! People who are more cost-conscious will tend to gravitate to Android, and will also likely be more wary of advertising.
The smart people know they are been watched and are just using the service as a free tool.
That reduces the userbase to a vast trendy herd. As many other telco makers have found, that vast trendy herd is cheap and fickle.
The other aspect is code been 'open' 'free' and i.e. 'not MS, Apple'. That has helped a lot with the branding propaganda.
With MS and Apple you knew what kind of walled garden you where buying into. To alter aspects of the open usersbase experience mid generation is a hard sell.
To alter the hardware side would just see firms take the open aspects and early 1980's desktop reverse-engineer hardware again.
Google would be left with holding a layer of software between open software and cheap whitebox hardware.
Domestic spying is now "Benign Information Gathering"
They annoy users by panicing any time a certificate is signed by an authority not on the list.
This is desired behavior for SSL. Otherwise, a man in the middle could start his own private CA and issue certs for each site that you view. Bug 460374 shows MITM in the wild. If I wanted to verify self-signed certificates through route diversity, I'd install the Perspectives extension. (And I have.)
When Google released Chrome, Firefox decided they wanted to have a Chrome-like super fast release cycle, which hurt extensions.
It hurt native extensions other than NPAPI media handlers, but it led to a more-or-less stable API for writing extensions completely in JavaScript.
But if they are to now, immediately, would be a very good time.
I still don't own an Android device so.. Makes decisions easier :)
You can't start charging or locking down something that used to be free and open without people getting pissed off about it. It's really that simple.
They knew what it used to be like, and it used to be better. It was doing fine, and it didn't need fucking with. They're pissed that you fucked with it and made it worse.
If they don't focus on making money, their shareholders can sue them. Companies are there to make money, they can't be twisted into innovation factories. If they could we'd probably have free energy and plentiful drinking water by now.
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This is an honest question. Can google ask money for Android since most of its code (or at least part of it) comes from linux?
Wouldn't they have to take all linux code out before being allowed to monetize it?
Any one else seriously annoyed by this... something that entirely shouldnt matter? Dunno why, but it does.
I havent seen it, sounded too depressing / prescient, but I imagine this to be in the vein of Idiocracy [wikipedia.org].
Return on investment for mobile advertising is less effective on Google devices because Google users are smarter.
Google just need the data which users give away when using Android. All those searches, GPS data, emails, whatever else users are subconsciously giving away so Google can turn every user in to a product to sell to advertisers. As mobile becomes more and more prominent, Google is going to have to have rely more on Android to bring in revenue. Any plans which could negatively effect their market share is completely out of the question.
One day Android will lose its market share and it'll be the first sign in the fall of Google ad business.
Google's best bet is to cut a deal with Samsung and forget about the rest of the android manufacturers. Samsung already has locked up the Android market; anything that can tighten that hold is good for Google and Samsung if they form a partnership. Since key parts of the handset OS are licensed under ASL, not GPL, Google can focus on developing a Samsung specific advanced version of Android that need not be made broadly available, Samsung on the hardware end, and both on creating a content delivery eco system unique to their offerings. Essentially, they become very Apple-like in how they approach the marketplace.
I'm a consultant - I convert gibberish into cash-flow.
http://m.weeklystandard.com/blogs/obamacare-website-violates-licensing-agreement-copyrighted-software_763666.html
It is true you can block adds, but rooting a phone to do so i highly recommended, if i ask arround in my colleges (business osftware development) most of them did not bother to root. Those who did only some botherd to block the advertisements.
As long as this is only a very small percentage, google does not care about fighting ad blockers. They removed the ad-blockes form play and from there they decided not to care.
Fighting your users is seldom a good strategy.
ios does have hosts file. YOu "only" have to root (/jailbreak) it.
As weird as it may sound, maybe it will push people to the Ubuntu stuff for phones if Canoical plays things right?
~~ Behold the flying cow with a rail gun! ~~
Google's strategy involves domination first, monetizing next. What better way to dominate, than giving away something almost for free. Nothing new, but works well.
That's simply false. The Free Software Foundation and the Red Cross are corporations. Do you think they focus on making money?
Google has given away over a BILLION dollars to charity.
Shareholders have a cause of action if board members or executives take company assets and convert them to their PERSONAL use in a way that damages shareholders.
The board and executives are serving as representatives of the shareholders, so they aren't allowed to put their personal gain above the interests of the shareholders they represent.
The clearest example of that is that the CEO can't "donate" $100,000 of shareholder money to himself. They can, and do, donate to causes that don't directly benefit the executives making the decision.
"If they could we'd probably have free energy and plentiful drinking water by now."
Funny you should mention that. Google has given millions to water projects in Africa, like this one:
http://www.google.com/giving/impact-awards.html#charity_water
. If they could we'd probably have free energy and plentiful drinking water by now.
The user wants to use a mobile, not mainly searching for apps. Found an interesting study about this:
http://www.statista.com/statistics/248343/distribution-of-time-spent-ios-and-android-apps-by-category/
also most small kids or older people don't care if it is iOs or android
It's perfectly ok to sell Android and Linux according to the GPL, the license used by Linux.
http://www.gnu.org/licenses/gpl-faq.html#DoesTheGPLAllowMoney
Dangerous, sexy, turing complete: Femme Bots
Google invested in Android to insure their continued relevance in a world transitioning from desktop/web-based internet access to mobile/app based access.
Sure they got prominent product placement on iOS, between the original Google Maps and THE search engine baked in until iOS 6 came out. Google (wisely) didn't want to be beholden to a benevolent third party for access to their user base.
I believe what we are seeing is a faster technology company life cycle than what we saw with Microsoft.
Microsoft peaked with it's desktop/laptop OS monopoly and then crumbled when the consumer technology paradigm shifted to mobile/tablet.
Like wise Google has enjoyed more than a decade of search monopoly.
(Effectively, you are free to choose other search engines, but internet consumers don't. They are brand locked-in)
My perspective is as a website owner who has become fed up with the page ranking shenanigans of each of Google's search engine updates.
It's fairly obvious to me that Google purposely ranks lower websites who they feel should be paying them to get the audience they once enjoyed organically.
As an ordinary Google search user I see poorer quality search results than I did previously.
It's smacks of desperation.
Luckily I realised the vulnerability of my online business to being dependant on Google for clients more than a year ago.
Also, using analytics, I spotted that the desktop visitors were declining 10% annually in favour of mobile visitors.
So at the beginning of this year I decide to create mobile App versions of my website business.
Choosing to do iOS only Apps was the right decision.
If you are going to dip your toe in then you want to do it in the most lucrative market.
At almost 3x the revenue of Android in addition to lower support and development costs (Android is fragmented over vendors/platforms/OS versions/stores) iOS makes more sense in every way.
I hear the cries for "When are you doing an Android version?", from my website users to which I give the honest reply "When it makes financial sense".
I doubt if I'm alone in this and it makes me wonder how Google can turn around their longer term prospects and make Android as much of a success as iOS.
It may already be too late.
When your main product "advertising" is being sold at lower and lower prices in order to maintain income then a simple graph will show where the point arrives that cost of overheads meet a break even point.
I hate advertising on mobile and as tech goes even smaller and less obvious and more useful the advertising market will have to go elsewhere.
Googles self driving cars had better work out and stand above others in the same race, Toyota, Volvo etc
{ Pillar candles great for when the power fails and you cant see the keyboard..
...what email app are you going to use? Presumably you use some cloud-based 'free' email service. Be it gmail, yahoo, outlook, aol, etc. These are all ad-supported, and if they don't 'read' your mail in order to better target the ads, it's because they haven't (yet) figured out how. And if they haven't figured that out, I'd be just as worried about whether they've figured out how to keep intruders from reading your mail instead...
So, when it comes to ad-supported free services, the standard probably shouldn't be whether they are scanning your mail (sure, if you can find a service you trust that doesn't, by all means...), but just how annoying the resulting ad barrage is. So far, Google has kept their advertising subtle, and even occasionally useful. I agree it's starting to get creepy when YouTube offers to show me videos based on stuff I searched for on Google. Haven't yet noticed it happening based on my email contents, but I'm sure it will. Creepy, but oddly efficient - i.e. better than random suggestions.
It remains to be seen how much creepiness I can endure - or whether I'll start to take that creepiness for granted, and 'enjoy' the resulting targeted stuff. Of course, with a little paranoia, creepy morphs readily into scary and oppressive. But other than occasionally (and reluctantly) complying with the NSA, Google has stayed pretty transparent about what it does, and lets you opt out of the worst of it. Evil is in the eye of the beholder...
Posted from my Android phone. Oh, I can change this? There, that's better...
Google sold their soul to the carriers and let them get away with anything they want. Most new Android phones have terrible battery life due to the crapware embedded into the rom. You can go the nerdy route and spend a huge amount of time getting a halfway stable phone or just take your lumps with apps running in the background that you don't use.
Personally I'm over it. Google turned their back on my Nexus 1 and I won't buy another Android phone. When this phone stops working I'm just going to go buy an iPhone. I just want a phone that works that I don't have to fight with and tinker with and watch the battery go down because of all the crapware running on it. I hate Apple with a passion but at least they are not willing to trade user experience for their carrier partnerships.
I just read in another article that the Nexus 5 will sell for $349. That must be at or below the cost of production, comparing to similar models and iPhones of like generation.
So Google can sell phones for zero profit, and then make their money how? *IS* it advertising? Or is it apps and media? Or nothing at all, they just want to take over the market?
It seems to me that they're best off capturing share until the ad revenue means the bottom line is negative. Then even a few pennies per box will mean real income.
Talk of monetizing the Android, a week after MicroSoft decides to give
it's phone software away; in hope many will select the dual bootable Windows
over Android.
I didn't post this, then today I read "Google shares touch $1,000 for the first time ever"
http://www.cnbc.com/id/101093044 a surge in mobile and video advertising that helped drive quarterly revenue up 23 percent.
Google seems to be doing rather nicely, thank you
Google has started doing small things that tick me off, but two request one for each account
to be removed from Google+ was met without the whining that had me on facebook 4 years
after I thought I had quit that POS.
Quoting an Apple fan boy http://venturebeat.com/author/johnkoetsier/ who use a company that
agrees with his agenda http://www.nanigans.com/ is just sad.
A not-for-profit corporation is an obvious exception. Google is for-profit. Google can only give away money if that ultimately helps profits.
Democracy Now! - your daily, uncensored, corporate-free
Sorry, you're simply mistaken. I've been on the board of directors of nonprofit and for profit corporations. For the profit company, we could, as I explained, do just about anything EXCEPT convert company assets to personal use.
For most for profit corporations, the Articles of Incorporation almost always say the purpose of the corporation is "any lawful purpose" because the board is supposed to abide by the articles. For a nonprofit, the articles are often more specific. So it's actually the nonprofit that's more limited.
If you're interested in actually knowing something about this stuff rather than spouting BS, I can post Articles for both for-profit and non-profit corporations I'm involved in so you can read them over and get a better understanding.