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Google denied a report that it is sharing advertising revenues derived from mobile applications on Android smartphones with carrier and handset partners, noting that it currently only shares sales collected from search advertising.
MocoNews suggested March 25 that phone makers and carriers are shipping so many Android phones because Google pays these parties a portion of the ad sales it collects from Google applications consumed on those devices.
These deals were designed for carriers and partners that sold smartphones that ship with Google’s mobile applications for Android preinstalled on the handsets.
Such devices include the Motorola Droid from Verizon Wireless and HTC-built Nexus One sold by Google. Both smartphones include Google Maps, Gmail, YouTube, Google Buzz, Google Shopper and many other apps.
However, a Google spokesperson told eWEEK March 26 that the initial MocoNews report is not true, noting: “We share revenue on search, not on mobile applications. The same is true for non-Android devices that use Google as the default search engine.”
What if Google were doling out dollars for ads served on all of its mobile apps? Such sweetheart deals could alter the competitive landscape for handset makers that aren’t building Android phones, including Apple, Microsoft, Nokia and Palm.
Or perhaps not. Google hasn’t ably figured out a way to make its success in serving ads with its mobile search app translate to Gmail, YouTube and its other applications.
As Silicon Insider noted, paying partners ad shares for such apps would also be detrimental to Google’s bottom line.
Google lists at least 15 mobile apps, none of which is generating heavy ad dollars. If Google apportioned money made from ads for all of its mobile apps to carriers and manufacturers, it would undermine the point of Android, which is to carve out as big a slice of the mobile Web ad pie as possible.
Hence the search engine’s $750 million bid for AdMob, whose mobile display ads and in-app ads success has made it a prized possession. Unfortunately for Google, the Federal Trade Commission hasn’t yet seen fit to grant Google’s purchase wish.
Still, there is no doubt Android phones are proliferating. At least five new Android smartphones were unveiled at CTIA Wireless 2010 last week, including devices from Sprint and HTC, Kyocera, Motorola, Dell and Samsung.
Moreover, spokespeople for Sony Ericsson and LG Electronics (paywall warning) told the Wall Street Journal they were not scared to build and sell Android devices despite Apple’s patent infringement lawsuit versus HTC.
This confidence in Android, and in HTC and Google’s ability to protect it versus litigation, bodes well for the open-source platform.