updated 06:05 pm EDT, Thu March 25, 2010
Google uses ads as financial incentive for Android
Google is steering carriers towards Android by letting them take a cut of ad revenue, a leak may have confirmed today. More than one tipster claimed that any provider with Android phones using Google's official apps gets an unspecified percentage of the revenue from the ads that the company runs, at least in its own apps. Some of the arrangements are said by mocoNews to be carrier-specific.
The revenue itself, at present, wouldn't amount to a major payoff for carriers as Google only does a small amount of advertising within its own spaces. However, its buyout of AdMob if approved could see the revenue sharing extend to many third-party apps. As the largest provider for mobile ads, AdMob would reach into most of the Android ecosystem and give a more meaningful take from each Android phone.
Google hasn't commented on the accuracy of the claims.
If true, the revenue splitting would suggest that at least some carriers are adopting Android partly as a financial incentive and less out of sheer interest. Carriers like Verizon have already negotiated ad deals with Google and Microsoft in the past and have been keen to delay becoming "dumb pipes" where revenue comes solely from plans rather than extras like ads or portals. Verizon in particular would stand to benefit as the runaway success of the Droid now has hundreds of thousands, and more likely millions, of revenue-generating phones on its network.
Such a deal might also explain Apple's eagerness to buy Quattro Wireless after losing out on bidding for AdMob. The iPhone producer has openly signaled its intent to foster ads on its devices and could use a similar deal to attract and keep carriers that might otherwise hesitate to adopt the iPhone.