Google Says Android Money Comes from Mobile Ads

Google AdSense partner Carnival Cruises increased bookings from mobile phones by 175 percent when they began offering click-to-call ads, Rosenberg said. He noted that click-through rates are up 6 percent when Google provides a phone number and 8 percent when it offers a local address with ads.

Android is the heart Google's offensive on the nascent mobile ad market.

Pichette noted that "open platforms with the new generation of apps is important. We do know these new smartphones create new activities," which is why Google has invested heavily in search advertising and shelled out $750 million for AdMob.

Thanks to its purchase of AdMob, Google will also be able to follow Apple's iAd advertising platform and let developers inject applications directly within ads to provide a more seamless, interactive experience.

Financial analysts came away confident if not impressed with Google's mobile strategy after the call.

Caris & Company's Sandeep Aggarwal said in a research note July 16:

"Google's mobile strategy is shaping up nicely. In our view, Google has done a great job with its mobile strategy and has emerged as one of the most formidable players in mobile market... Android-based smartphones are coming out of all major device manufacturers and successfully competing with iPhone."

Of course, Google has just scratched the surface here, as has Apple with the iPhone 4 and iAd.

Rosenberg said Google plans to improve such things as the e-commerce billing infrastructure for the Android Market, which now sports 70,000 applications. FBR Capital Markets seconded Google's sentiment in a July 16 note:

"As the company points out, the business remains relatively immature relative to desktop-based search, and we believe that the monetization of this inventory represents a significant growth opportunity for the company."