Google’s Android has become one of the best selling mobile operating systems. One of the reasons why so many hardware manufacturers use Android is because it is an open source project. Open source projects allows users, including hardware makers, to use the software for free.
Having a free operating system for mobile devices is great for the hardware makers, but it does not earn Google any money. Building and updating Android is not free and Google needs to earn money to keep improving and developing it. So how does Google make money with Android?
Most people think of Google as a search company. While they do have the most dominant Internet search engine, it is not their main business. Google is really an ad company. They sell ads for their search engine results page and other Internet pages that use Google’s Adsense revenue generating ads. This is where Google makes it’s money. The search engine is just a vehicle to deliver ads to the user.
Google’s main strategy is to bring people to it’s sites and show them ads. They do this by offering free services like search, email, news, photo sharing, and video sharing. The more people who come to their site, the more money Google makes. Adsense allows Google to extend the reach of their ad network to other sites. Android allows Google to extend their reach into the mobile market-space.
The majority of Android users don’t pay for apps like iOS users do. This works well for Google, as they make money by putting ads into free applications. This has become the main way Google earns money off of Android today. There are other ways as well. They still can earn money through ads on the web browser and web search. While Google does make money through mobile web browsing, it is a smaller amount since there is less space to display ads. They could also create premium applications for Android that they would sell. The last one still does not fit with Google’s strategy or their users who like free applications.
It still remains that the main revenue source for Google is Ad money. Google will continue to try to place their ads as many places as they can to generate more income. Android is another opportunity for Google to place more ads. Selling ads for free applications has become Android’s main money generator. Google will continue to push free applications instead of payed ones for this reason.