Update: A report from the Guardian that Google only generated $543 million in revenue from Android is based on bad information, says a source close to Google.Guardian reporter Charles Arthur examined court filings from Oracle’s lawsuit against Google and seemed to figure out the revenue number.
The key number he used for his report was $2.8 million. He believed this was a pre-settlement offer that revealed how much Google got from Android.
In fact, according to our source, this is just a value placed on the patent, and it has nothing to do with Google’s Android revenue.
Below is our original write up of the news:
Original: Google is generating next to nothing in terms of revenue from its dominant Android operating system, Charles Arthur at the Guardian reports.
Arthur reports that Google generated only $543 million in revenue between 2008 and 2011 from Android. He got his figure by analysing a settlement Google offered Oracle.
Oracle is suing Google, saying that it uses key software technology Oracle owns. As part of the case, Google offered Oracle $2.8 million, which is supposed to be a percentage of revenue generated by Android, according to Arthur.
From there, Arthur calculated the revenue number for Android. We reached out to Google for comment, but haven’t heard back yet. (Google told the Guardian it had no comment.)
This is a tiny amount of revenue, but it shouldn’t be a shock. Google gives away Android for free. It’s hard to make money doing that.
And if you’re going to judge Android on three years of revenue, you’re missing the point. Google now owns the the biggest slice of the most important computing market. This weakens all of its primary rivals — Facebook, Microsoft, Amazon, and Apple.
Further, we don’t know what the revenue growth rate is. Maybe it got $30 million in revenue in 2008, $60 million in 2009, $120 million in 2010, and $333 million last year. If you saw that growth you’d be blown away.
Bottom line is this: Android may not generate a lot of revenue right now, but that doesn’t mean it’s not insanely valuable.
Update: A source close to Google tells us the Guardian’s report is inaccurate. Our source says the $2.8 million number isn’t reflective of revenue, it’s a value of the patents.