Despite the fact that Google controls Android, the largest mobile operating system in the world, analysts still worry that the company is “challenged” in mobile.Just last week, Heather Bellini at Goldman Sachs laid out the reasons for scepticism about Google’s mobile business. Here they are, briefly:
- Google had 70% of smartphone shipments last quarter, but Apple had 60% of mobile internet traffic.
- Smartphone cost per click is about 30-50% of those on the desktop.
- Google still doesn’t have a super popular tablet, which means people buy iPads, which could lead to iPhone sales.
All of these critiques are pretty standard. Especially the cost per click argument. Google could be trading desktop search dollars for mobile search dimes.
CEO Larry Page shoots down these criticisms in a new interview with Miguel Helft at Fortune.
Speaking about mobile, he says, “we’re going to make more money than we do now.”
The reason Page believes Google’s earnings can increase is that mobile has even more data attached to it than desktop advertising.
“I view a whole bunch of things as additive that you can do on mobile that you couldn’t do before,” says Page. “I think we’re in the early stages of monetization. The fact that a phone has a location is really helpful for monetization.”
This isn’t exactly the most rock solid defence. But, it’s good to hear Page talking about building a big business with mobile.
Android, for all its market share, probably doesn’t make very much money. Factoring in the $12 billion or so it spent to acquire money-losing Motorola, Google has spent a lot of money to compete in mobile.
If it doesn’t result in Google making more money than it does now, that’s going to be a big problem.
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