Earlier this week a report from The Guardian stated that Google was making four times as much money off of advertising from iPhone, iPad and iPod ads than it was on the entire Android platform. Android Community elected not to run the story, because frankly, we had doubts about the author’s methods of calculation based on a proposed settlement in the Oracle lawsuit. It appears that we weren’t the only ones: Business Insider reports that a source close to Google has invalidated the claim, saying that the Guardian misunderstood the value and intention of the settlement.
It goes something like this: Google offered to settle the lawsuit with Oracle (now over a year in the making) for $2.8 million US dollars. Charles Arthur of the Guardian reckoned that this figure was a percentage of the total profits of Android, which he gave at .515% – about one two-hundredth of the total. Extrapolating from there, he figured that Android had made Google only $550 million dollars since its introduction in 2008. Getting numbers from Google’s total advertising revenue, he compared it to Google’s ad sales for the iOS platform in the same time period, totaling about $2 billion. (Just for instance, Oracle’s previous assessment that Google makes $10 million a day off of Android would have made it nearly a billion this year alone.)
But Arthur made a mistake that every grade school teacher will call you on: he didn’t show his work. A source “close to Google” told Business Insider that the 2.8 million dollar settlement (which has not been accepted) wasn’t reached by any sort of calculation based on Android profits. Instead it was what Google valued Oracle’s relevant patents at. A little critical thinking goes a long way: with the Android userbase roughly double that of iOS on smartphones and gaining in tablets, not to mention Google’s 30% cut of paid apps in the Android Market/Google Play Store, the original conclusion seems somewhat off base.
Of course, Google isn’t bringing in nearly as much revenue on Android as Apple is on iOS, because it manufactures no hardware and gives its operating system away for free. Google doesn’t mind – it made almost 40 billion in ad revenue last year.