Google has long been cast by Wall Street analysts and some tech executives as a “one-trick pony” because it earns nearly all revenue from one source–online ads.
The company is trying to obtain a greater share of the online display-ad market, and it’s gotten recent traction thanks to a new auction system that matches buyers with sellers.
“This can be a powerful business, a 10-plus billion-dollar business” per year for Google, Schmidt said.
He also said Google is positioning itself to earn $10 billion or more per year in the mobile device business, thanks to its Android operating system.
Google is giving away the Android software for free to device makers, who are using it to power dozens of popular devices. By spreading Android, which is growing at a rate of 160,000 new handset activations per day, the company ensures that its Internet search, maps and other ad-supported services will endure as users shift to mobile devices.
“If we have a billion people using Android, you think we can’t make money from that?” Schmidt asked rhetorically. All it would take, he said, is $10 per user per year. Among other things, Google might earn such sums from selling access to digital content from newspapers.
A billion people paying for newspaper content? Sounds good to us.
I am surprised that cloud is not mentioned in this report. If you ask me to name the next tricks, I would say mobile and cloud. I am not sure how Google can monetize Android directly. Using Bing on Android is not much different than Bing anywhere else.
The trend is right. The ubiquitous mobile computing devises would make cloud computing more important than ever. If Google can secure its leadership in mobile search and cloud computing, money will come in eventually. I would say Android is making the tides, with the help from iPhone and the like, but not really necessarily generate revenue by itself. It is a bet on cloud and mobile, just as Chrome OS.
