Linked by Thom Holwerda on Wed 23rd May 2012 16:13 UTC
Google Google CEO Larry Page was interviewed on Charlie Rose recently, and there was certainly some interesting stuff in there. Sadly, the interview suffers from the curse of modern journalism in that it was all a bit timid and civil (no truly harsh and confronting questions), but despite that, it's still a good watch. Two quotes from Page really stood out to me.
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RE[4]: are you kidding?
by Tony Swash on Thu 24th May 2012 13:59 UTC in reply to "RE[3]: are you kidding?"
Tony Swash
Member since:
2009-08-22


I'm sorry, do you know them personally to make such conclusions?


I don't know them personally but I have read extensively on Google and it's founders including several books, many article and interviews. I have also observed Google's actions over many years. The the evidence I feel is pretty strong that it is correct saying that the culture of Google is "that all information should be free and open to Google, that copying anything was OK". I do not know of any evidence that the two founders of Google hold different views than that expressed by Google's collective culture or have battled to change that culture, and in many interviews they seem to endorse it. I am surprised that anybody finds this controversial. Google wants to open up all the world's data for inspection. Is that not what Google says it wants? If one believes such a thing as a central organising pillar of one's corporate culture (irrespective of whether it is a good or bad thing) then certain patterns of behaviour will result.


There is zero evidence that Apple "have been looking to shutdown the Android competition, which hasn't really been working out swell for them"

Asserting patent claims that go beyond the UI and anything visual is, in fact, such evidence. I can understand that "slide-to-unlock" is more of a visual element, but real time API patent?



But how is that evidence of Apple's strategic goals? That is just one tactical legal battle in a legal war, the issue at point is what is the aim of that war. It is often, lazily, claimed it is to 'shut down the competition'. I am arguing that not only is that not the aim of Apple's legal war but that such an aim is patently absurd and would only be pursued by foolish people. I don't think Apple's management look like such fools. It's perfectly possible to still object to Apple's legal actions whilst making statement that are accurate about what they are doing and why. Spouting inaccurate hyperbole is never good for one's cause in my experience.


No one makes much money from mobile advertising.

Google made 7% of their total revenue, that is not a small amount.


First off one has to bear in mind that Google make more money from iOS than from Android. That has been confirmed by Google in public statements and is not disputed.

Horace Dediu at Asymco calculates that overall, Android could amount to about 3.5% of total Google revenues and about 5% of operating earnings.

http://www.asymco.com/2012/05/16/androids-contribution-to-google/

Horace in another article calculates that Google receives a contribution of $2.75 per device per year from Android

http://www.asymco.com/2012/05/14/the-android-income-statement/

Lets assume that Android reaches an installed base of 1 billion devices in the next couple of years and that all of those devices include Google services and thus generate income for Google at the rate that such devices appear to do. That means 1 billion Android devices earns Google around $2.75 billion per year (which tallies nicely with your $7% figure). So with a billion devices Google's Android business is nice but not spectacular and will not break even for several years (until the costs of the wholly Android based Motorola acquisition are recouped for example).

The crucial strategic issue for Google and for any assessment of it's Android strategy is whether those mobile revenues are additional to Google's existing business. If one believes, as I do, that the rise of mobile internet connected computing devices will lead to a long term and secular decline in desktop computing then Google may be faced with declining revenues. This is because of the key point I made and which you did not address which is that all evidence indicates strongly that each mobile user generate much less advertising income than each desktop user and almost all of Google's income is from advertising.

Finally as a comparison of the merits of relative business strategies one can compare Google's mobile business strategy (Android) to Apple's (selling integrated devices attached to content stacks).

Google makes about $2.75 per handset.

Apple makes a profit of $357 per iPhone and continues to make revenue in relation to content transactions.

Do the math. If both iOS and Android reach a billion devices each (which is quite possible and in fact likely) which business strategy is better?

If the internet based on desktop browsers actually declines how can Google make up the shortfall in revenues from mobile?

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