There is a general thought going around the Internet that by making Android open source, Google has lost control of the platform as companies like Amazon and Facebook use to source code fork to create their own devices. It has been said that Google has lost the keys to Android and it was a mistake to let anyone outside of Google-approved original equipment manufacturers build off the platform.
Has Google really lost control of Android? By forking Android to their needs, have Amazon and Facebook really taken money out of Google’s pockets? Probably not. In fact, with the Kindle Fire and rumored Facebook Phone, both Facebook and Amazon may have unwittingly become platform evangelists for the Android platform.
How Google Makes Money Off Of Android
Amazon and Facebook may be able to lock the Android Market out of their Android forks, but neither can fundamentally stop Google from making money through the platform. Google does not charge a license fee for Android (though Microsoft does take a cut from the OEMs with patent deals) and does not take a cut from developers from purchases in the Android Market or in-app purchases. Once Google open sources the code, anybody can use it. That will include Ice Cream Sandwich, which Google put out to developers a couple of weeks ago (Honeycomb never matured and the source code was never released).
Google made $2.5 billion off of Android after for the 12 months ending in its Q3 earnings statement. Android is selling more devices than ever, taking ore than 50% of the market in Q3. That is a hefty chunk of change for a platform that does not charge for licenses or take a cut from developers. Developers get 70% of the cut from the Android Market while the carriers and payments processors get the other 30%.
An Ad Is An Ad, No Matter Where It Is
Google, at its very core, is an advertising company. To Google, Android is a vehicle to deliver ads. If you use the Internet or mobile apps (yes, even those found on iOS devices), you are running into Google’s ads either through AdSense or AdMob. The more Android available, the more people using mobile interfaces, the more opportunity for Google to put ads in front of eyeballs.
There is nothing that Amazon or Facebook can do to stop this. Facebook has more of an opportunity to steal advertising revenue from Google through mobile because Facebook is fundamentally more focused on ads to make money. But, if a someone using a Facebook Phone deviates out of the Facebook platform tacked on top of Android, Google will be able to serve them ads. The only ads that Amazon servces are for its own services and many of the ads that show up in apps for the Kindle Fire are, one way or another, going through Google or some other type of mobile advertising network, like Nexage which is still small in comparison with AdMob.
One place that Google has the opportunity to lose revenue from Amazon and Facebook forks is where the two companies curtail the use of native Google Apps like Gmail, Talk, Calendars, Docs, Music, YouTube and Voice. The Kindle Fire has Gmail integration but its own native integration for music, video and documents. The Google Docs app and YouTube are not in the Amazon Appstore. Facebook does not have that type of functionality so it would be wise to consider letting Google Apps have access to the platform. Google does have the great equalizer on its side though – the Web – where all of its apps can be accessed through the browser.
What it comes down to is that the more companies use Android, even if heavily modified, Google still wins. There is little that Amazon and Facebook can do to stop that.