How Google’s Android Business Gets To $10 Billion In Annual Revenues
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Google (NSDQ: GOOG) CEO Eric Schmidt did a little napkin math today to explain how it plans to earn $10 billion in annual revenues—or more—in mobile even though they are giving the Android operating system away for free. In an interview with the WSJ, he said it’s pretty easy. The goal is to get as many Android users as possible so that a large audience is using its ad-supported mobile products, like search and maps.
“If we have a billion people using Android, you think we can’t make money from that?” Schmidt asked rhetorically. At one billion users, it would take $10 a users in advertising to make $10 billion.
How long will it take for Android to get to one billion users? Currently, it is growing at a rate of 160,000 new handset activations per day. At that rate, it would take 17 years to hit that goal. For Google to hit that figure in five years, it would have to start adding nearly 550,000 Android handsets a day.
Perhaps that won’t be too difficult. Earlier this summer, Android’s adoption rate was clocked at 60 percent a month.
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