If they control the platform, then it's much more likely that their search engine will run on it, and that they will make money of ads in that way.
The number is the amount of additional search revenue Google are getting from mobile. That's not from Android, that's from mobile.
This will break into three categories:
1) Searches which were made on Android but where, if Android hadn't ever existed, the user would have had another mobile device and made the same search anyway. These are searches which are more lucrative for Google (because Apple or whoever aren't getting a cut) because of Android but where some value would still have existed.
2) Searches which were made on Android where, if Android didn't exist, the user wouldn't own a smart phone and the search would never have happened. These are the biggest contribution (per search) as it's revenue where Google are taking a large share and no revenue would otherwise have existed, however it's not clear how many there are. On one hand you could argue that almost everyone who bought an Android phone would probably have bought another smart phone (I personally don't think open source purists are a massive market share) but on the other hand there is a very real case that Android and it's battle with Apple has raised the profile of smart phones and generated choice which will have resulted in smart phone users who otherwise wouldn't have bought a smart phone (yet).
3) Searches which weren't made on Android. On the surface these wouldn't seem, as far as I can see, to actually support an argument for Android from a financial perspective, but I'm not sure that's true, for the same reasons outlined above (the larger general market - that is Android has driven the smart phone market and in doing so has helped sales for all smart phone OSes)
Google probably have the data to break the number down between these categories (at least roughly), the rest of us can only speculate, however I think even the most conservative estimates would suggest that Android is pulling it's weight and in all probability, then some.
I like how you broke down the different categories for search revenue related to mobile though. Let's put some phony amounts on them just for fun.
Let's begin with the assumption that Google gets $1 per mobile search. (I'm using mobile search here because that's the category of search we are interested in.) That is, every mobile search, on average, generates $1 in revenue.
1) Mobile searches which were made on Android but where, if Android hadn't ever existed, the user would have had another mobile device and made the same search anyway.
Google loses money here because the search would have been made anyway. The loss comes from developing Android. Let's say Google loses 10 cents. (Total BS number!)
2) Mobile searches which were made on Android where, if Android didn't exist, the user wouldn't own a smart phone and the search would never have happened.
Google earns $0.9 here because they had to develop Android, but making $0.9 is better than making $0.
3) Mobile searches which weren't made on Android.
I feel like this goes in the same category as 1) because these are mobile searches that would have been made anyways, regardless of the existence of Android. The only difference is that in case 1) the search was made on Android. But for the purpose of justifying the existence of Android, they are one and the same. So Google loses 10 cents here because the would have gotten this search if they had done nothing.
Clearly Google needs category 2) to be as big as possible in order to justify the existence of Android. So the whole thing boils down to: "If Android didn't exist, the user wouldn't buy a smartphone to do mobile search".
I feel that if Android didn't exist, users would go out and buy an iPhone or something similar. I don't think the phone manufacturers would have just let Apple run away with the smartphone market so it would be in their best interest to create something competitive. But the bottom line is that Android seems like a needless expense for Google.
>> 1) Mobile searches which were made on Android but where, if Android hadn't ever existed, the user would >> have had another mobile device and made the same search anyway. > Google loses money here because the search would have been made anyway. The loss comes from developing > Android. Let's say Google loses 10 cents. (Total BS number!)
For non-Android OSes, Google pay Apple (or whoever) to run with Google as the default search engine. In essence they're sharing the revenue for these searches if they're not run on Android which is why they're more profitable because Android exists so they do "make" money rather than lose it.
In this category Android is best seen as a mechanism for cost control - it doesn't increase their revenue but it does reduce their outgoings.
> 3) Mobile searches which weren't made on Android. > I feel like this goes in the same category
I agree this is the hardest category to justify and part of me agrees with you. The only thing that gives me pause is (a) Google and it's partners have thrown a lot of money into advertising and PR which will likely have had some impact on public uptake of smartphones and (b) Android has bought smartphones in at lower price points which simple economics tell us will have expanded the market - you can get a decent Android handset in the UK for free on a contract, the iPhone 4 kicks off at over £300 on the same monthly deal.
> I feel that if Android didn't exist, users would go out and buy an iPhone or something similar. I don't think the > phone manufacturers would have just let Apple run away with the smartphone market so it would be in their best > interest to create something competitive. But the bottom line is that Android seems like a needless expense for > Google.
I think that's easy to assert but the attempts of RIM, Nokia, Palm, Microsoft and others don't really back it up. RIM has a place for sure but it's not directly in the iPhone space. The others have all tried and produced offerings which are either technically or commercially not in the same ballpark as Apple are managing. What makes you think any of them (or someone else - Samsung? HTC? Morotola? Sony-Ericson? Not exactly go to companies for great software experiences) would be capable of competing?
Frankly Android is the only mobile OS going toe to toe with Apple with any level of success.
With regard to all these other search engines, I find it hard to take them seriously. If all these specialized searches were so awesome, they would've been pushed to a larger market (the web) so that these companies could leverage it as Google has done.
Are you suggesting that Sprint would lock its users into crappy SprintSearch and not use Google if Google didn't make Android to put on one of Sprint's phones? I think that's a possibility. But I feel that market forces would eventually force phone service providers and manufacturers to use the best search possible (or at least an almost as good version) or consumers would leave them.