Google lost over $97.7 million on Android in 2010

Google might not like to talk about how much money they're making off of Android, their mobile OS, but US judge William Alsup didn't have any problem doing just that yesterday. Reading from an internal Google document, Alsup revealed that Android lost money during every quarter of 2010, all in all presenting a 'big loss for the whole year,' according to Reuters.

The revelation came during Oracle's lawsuit against Google. Oracle accuses Google of infringing on their patents and trademarks involving Java. And even though Oracle says that how much money Google is or isn't making on Android shouldn't have any bearing on how much money they are or are not awarded for damages, the jury might beg to differ.

More importantly, though, this little nugget raises the question of exactly where Google's mobile business is taking it. While competitors like Apple and Microsoft make their money by selling hardware and software, Google's business model revolves around encouraging more use of their existing web services and advertising, with earnings coming from app sales being minuscule at best.

So, exactly how much money is Google losing here? The documents didn't exactly reveal all of the numbers, but it does say that Android revenues for 2010 were $97.7 million, so obviously Google lost at least that much. Another document (via The Verge) revealed during the case says that Google expected to lose about $113 million in Android in 2010. But by now, according to the same document, Google should be making around $248 million on Android, and $548 by next year.

So, are they? Who knows. So far, Google hasn't been very forthcoming when it comes to Android financials, and unless those numbers get really impressive, or they slip out during a trial, that's probably not gonna change. What we do know is that it's a lot harder to come up with financials for a product that relies a business model like Android's than it is for a more traditional model, like Apple's. For the most part, any money Google makes from Android will be indirect, and it'll take a broader look at the companies financials to see if that's really paying off.

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12 Comments

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Android itself may cost, but what does the platform bring in revenues?

The way I read it, it may cost say, $10 per device for google to support/develop android but how much money does that $10 bring back in advertising, app purchases, data etc. A lot more I would think. There are a hell of a lot of droids out there and even if each one only made a few bucks each thats a lot for google.

You have to spend money to make money anyway. They will pull profits soon. Especially after ICS, which is far far superior to any of the GB or froyo builds.

A bit of a misleading title...I'm not sure how you come up with a loss of at least $97.7M. If that was their revenue and they lost money every quarter that doesn't mean they lost more than $97.7+. Losses are recorded as the amount lost below $0 net profit, not revenues. If you use the methodology described here, then every company losses money because their profit or loss is always lower than revenues. The losses could actually be way more than $97.M as stated but not "at least". When discussing the actual performance of companies that provide us with our tech goodies, it might be useful to have a basic understanding of financial numbers.

They have to funnel the billions they make on their other products into something that loses money. It's the easiest way avoid paying taxes on it.

I love the Android OS, but if Google is losing money on it, the company will eventually stop supporting/upgrading it. This is what they have done with every other data-mining application they've created. They get the data they need, and then they kill it.

Tod Westlake said,
I love the Android OS, but if Google is losing money on it, the company will eventually stop supporting/upgrading it. This is what they have done with every other data-mining application they've created. They get the data they need, and then they kill it.

did you read the whole article?? they lost money in 2010. but in 2011 they made profit and expect to make 250 million in profit this year and $548 million next year. now why would they kill that one.

Tod Westlake said,
I love the Android OS, but if Google is losing money on it, the company will eventually stop supporting/upgrading it. This is what they have done with every other data-mining application they've created. They get the data they need, and then they kill it.

It's like the Xbox, Facebook, and many other large products. They may lose money on it for the first year or two, but it will become profitable.

Tod Westlake said,
I love the Android OS, but if Google is losing money on it, the company will eventually stop supporting/upgrading it. This is what they have done with every other data-mining application they've created. They get the data they need, and then they kill it.

Its open source my friend, Google can't simply kill it like RIM could with their BB OS, or Apple with their iOS. everyone but apple, nokia, microsoft and Rim will continue to support *their* implementation which is BASED off the kernel google releases. If this wasn't the case every device would be running a perfectly working ICS build months ago.

Edited by srbeen, May 4 2012, 7:34pm :

Is there any way to chronicle the history of "Google" without visiting "google.com"?

I ask because I've been on the 'net since before "Google" even existed, yet anything "unbiased"... I can't seem to find.

97.7 million, not sure how that could be, in 2011 alone they made 341 million as of Nov 1st from the market sales. With 239 of that going to developers, leaving them with 102 million in the bank, just from app sales. But then again, this story is about 2010 which is irrelevant now TBH.

xendrome said,
97.7 million, not sure how that could be, in 2011 alone they made 341 million as of Nov 1st from the market sales. With 239 of that going to developers, leaving them with 102 million in the bank, just from app sales. But then again, this story is about 2010 which is irrelevant now TBH.

Well, it takes time for anything new to start turning a profit. Look at the XBox, or Windows Phone... It makes sense that it would lose money for a while.

xendrome said,
97.7 million, not sure how that could be, in 2011 alone they made 341 million as of Nov 1st from the market sales. With 239 of that going to developers, leaving them with 102 million in the bank, just from app sales. But then again, this story is about 2010 which is irrelevant now TBH.

Android was not that big at the beginning of 2010 and it takes time for any business to turn to profit... I believe its not the same now because it has a huge user base and sales should be up eventually.. like mentioned in the article it would be making like 250 million which should have been the profit. and expected to make $548 by next year.