Ask HN: How does Google make money off of Android?

Your question reminds me of this quote from the movie Sneakers:<p>"There's a war out there, old friend. A world war. And it's not about who's got the most bullets. It's about who controls the information. What we see and hear, how we work, what we think... it's all about the information!"<p>When you boil Google down to its most-basic form, it a company in advertising business. In order to present their users with the most relevent ads (which theoretically will be more likely to be clicked-on) they need to build a profile of their users. In order to build this profile they need to get people to use as many of their services as possible, and the phone is just another component of that. The phone also reinforces people's dependence on their other services. So while you may not see an ad when using GMail on your phone, you're likely to use the desktop version of GMail as well, which means you'll see ads there. Same goes for search, as well as the other services that are linked through Android.<p>If you think about what information they have about somebody using their services (Search, GMail, Voice, Reader, Blogger, Maps, Shopper, Books, Finance, YouTube, News, Picasa, etc.) adding mobile to that set of data is the obvious next-step to ensure they know as much about their users as possible. It's all about the information, and who controls it.

<i>what prevents Google's competitors from removing that from the source and forking their own version of Android</i><p>On one level, nothing, and my understanding (at the level of hearsay) is that some Chinese firms have done just that.<p>On another level: What kind of lousy smartphone doesn't have Google? To the extent that people will use their phones to use Google, it doesn't matter if the phones <i>officially</i> support Google.<p>Finally, remember that in open source software the people who <i>don't</i> pay you don't matter, except as a source of goodwill and publicity (or, alternatively, a source of noise and complaints; the quality of your community is important). What matters is that enough people <i>do</i> pay you to cover and justify the costs.<p><i>how is this better than trying to make the best search engine so that every mobile device will use Google...?</i><p>That is a good question. The answer three years ago was "to the extent that the number of smartphones in use worldwide is lower than the <i>potential</i> number of smartphones that <i>could</i> be in use if they were more ubiquitous and cheap, Google is losing money, so it is in their best interest to make Google-capable phones as ubiquitous and cheap as possible." And that is still the answer today. The question, though, is: In the future, once the market for Google-capable phones is fully saturated, don't Google's incentives get smaller?<p>My guess is that, in the end [1], Google's incentives to throw resources at Android <i>will</i> be smaller, but of course Android will also be a middle-aged project by then, and probably substantially complete and less in need of constant engineering, and hopefully with an open-source community that can help with its maintenance.<p>---<p>[1] Beautiful weasel words, these. It's pretty much guaranteed that Google won't support Android forever, just as Apple no longer supports ProDOS and Microsoft no longer supports Windows 1.0. The question is whether <i>forever</i> is measured in months or decades.

They're worried that if others control the sector, then they might start building their own advertising platforms (or change the dominant revenue model to something else entirely) and cut Google out of the game. It's a preemptive strike, primarily against Apple. Bit like Microsoft's costly entrance into the home console market, just to ensure Sony didn't usurp the Windows/PC platform by providing equivalent services via Playstation.<p>Edit: they've probably also boosted their overall revenue in the short term because not everyone can afford an iPhone and the other vendors were so far behind iPhone OS, ads on their platforms weren't worth as much.

Answering the question "how does Google make money off of..." (regarding any of it's projects) can usually be answered by saying that Google has a vested interest in getting users to spend more time on the internet. For every hour that you are on the internet, you're probably using Google a few times.<p>This is how you can also answer "how does Google make money off of self-driving cars?" If people aren't driving their cars, they'll most likely be on the internet during their commute. If they are on the internet, they are probably using Google.<p>That said, Android provides a number of benefits to Google. Namely brand recognition, user interface research, and user GPS data. Ultimately though, the introduction of Android as a cheaper alternative to iOS and a more flexible alternative to BlackBerry probably contributed to smartphone sales much larger than the actual sales of Android devices (meaning: having an additional smartphone stimulated the demand for smartphones themselves).<p>TL;DR: The open-source nature of Android encourages increased smartphone production and consumption, thereby increasing consumer usage of the internet, and by default, Google.

Better smartphones = more browsing = more google traffic.<p>Before the first iPhone came out, most people only used their mobile phones to browse the net if they were desperate. Mobile browsers (except Opera) sucked. Only high-end phones had Opera.<p>Android makes smartphones better and cheaper, so more people will buy them. It makes mobile browsing better, so more people browse the web. This all drives traffic to google.

<a href="http://techcrunch.com/2010/10/15/google-android-money/" rel="nofollow">http://techcrunch.com/2010/10/15/google-android-money/</a> "the annualized run rate on mobile for Google is now one billion dollars" -&#62; that's the money they make of people searching on mobile (not just Android though) and clicking on ads.<p>If they control the platform, then it's much more likely that their search engine will run on it, and that they will make money of ads in that way.

Doesn't Google charge OEMs for Android certification and for the Google core apps (Gmail, Maps, Android Marketplace)? That's what I thought they were making money from.<p>Edit: Ah, yes, the Android documentation says that they're licensed separately:<p>"Android Market is only licensed to handset manufacturers shipping devices."<p>"The Google apps for Android, such as YouTube, Google Maps and Navigation, Gmail, and so on are Google properties that are not part of Android, and are licensed separately. Contact android-partnerships@google.com for inquiries related to those apps."<p>- via <a href="http://source.android.com/faqs.html" rel="nofollow">http://source.android.com/faqs.html</a><p>That still doesn't necessarily mean that they're charging for them, but I strongly suspect they are based on that wording. Does anyone know for sure?

Google passively makes money proportional to the number of people browsing the web. It is in Google's greatest interest for everybody to be online at all possible times and in all places. It doesn't matter where you are, what you are viewing. Your presence (in large numbers) converts to earnings for google, due to their large spread of Adsense ads.<p>Gmail, for example, has been a highly profitable endeavor. Not because they can serve ads, but it raised the bar for browser based email. More people are doing email in their browser because Gmail came out, whether it's on yahoo, hotmail, etc. Not leaving the browser increases the time spent browsing the web, which increases pageviews on google ads.<p>Android is just another free product Google uses to keep you browsing the web as much as possible.

Google's philosophy is that the more people who use the web, the better it is for Google. They believe that they are better than any competitor at monetizing the web, and so will win by helping others. So the more interaction with the web, the better it is for Google.<p>Keeping this in mind, a lot of Google's moves are rationalized. For instance, free wifi at Christmas, subsidized Google TV, and the android platform.

Controlling a major app store might be one motivation. Manufacturers don't have to hook their device up to the canonical Android app store, but many do (though some don't). The revenues are very small so far on a scale of search revenues, but might grow.<p>By designing both the app store and the platform, they can also try to ensure that their own apps are able to do what they want them to do. For example, it's not clear they could've rolled out the app that crowdsources Google Maps traffic data on another platform, especially a few years ago when it was rolled out on Android (<a href="http://googleblog.blogspot.com/2009/08/bright-side-of-sitting-in-traffic.html" rel="nofollow">http://googleblog.blogspot.com/2009/08/bright-side-of-sittin...</a>).

For apps sold on the Android market Google takes a 30% transaction fee, which is split between the payment processor and the carriers. Since AFAIK Google Checkout is the only supported payment processor, that should give them some revenue.

Google's profit come from secondary sources. If they make you use gmail and address they're able to know what kind of ads to show you and your friends. Increased profit is incidental for them.

First class support for GMail etc. above other providers wins conversions to GMail, then users use GMail on the desktop and are logged into Google whenever they are surfing the web.

One possibility: By the apps made by Google that are finely tailored for Android. Example is Google Voice.<p>So Google can indirectly generate money off Android.

No one really knows outside of Google.. We are all really speculating. Meanwhile Apple makes no bones about how much cash iOS is brings to the table

Android Market APP via CTS for OMEs to get it they have to abide by Android CTS and include google search.<p>OPhone can go different way because they provide their own Android Market and own Android Market app.<p>By enforcing some mobile devices having google search google makes money back on ads..$1 billion or more for mobile ads in 2010 and as the Google Android engineer staff is quite small and vastly below the $1 billion revenue figure in terms of costs.