Readaloo

Google’s child Android is dominating  the smartphone space. So we now question Google, on how they benefit from the Android phones- financially? Paid Content reports that Google has signed  revenue-sharing deals with the major wireless carriers who support Android phones. Google has a revenue sharing deal with handset makers as well. So when 60,000 phones are sold, cash counters at Google Inc is also going “chii—kiii—ng”.

The revenue sharing deals appear to be advertising revenue shared with carriers that support Android. For handset makers, the revenue comes in when they include Google applications like search, maps, Gmail etc which is not a requirement for Android phones. Well, the details are sketchy since Google is not as open as Android. Google declined to comment on their agreements stating they are private and confidential.

By being nosy, we found that the deal is applicable only to handsets that are Google branded like the Droid, Nexus One and G1. It excludes any phone that uses it own User Interface like HTC Evo or Samsung Behold II. Since, all Google applications will generate advertising revenue, Google can still afford to share their revenue. In fact, Google has nothing to loose. At present, direct revenue generation is only from the search application.

So, does this make Google look cheap? This is a common technique employed by Microsoft, HP and other giants to generate revenue. AOL, MacAffe or even less prominent softwares have paid pot load of cash to install their applications to the manufacturers. The largest loop hole in Google’s Model is that Android Operating system is open source, hence it cannot make a dime from licensing the operating system. If an Android phone does not make use of Google Applications, it wont be able to make any money through applications either. A good example is Moto Backflip!

Hence, there is nothing cheap about offering financial incentives to cell phone carriers or handset makers in the form of revenue sharing deals. After all Google’s revenue from these deals might be small, as revenue from apps like Gmail or Maps are nearly zero. However, Google is not a charitable organization to cut such deals if they don’t see a huge potential. After all, they are one of the most innovative companies on the planet.