Commentary

Suit Shows 'Extraordinary Magnitude' Of Google's Mobile Business

Like the truth, lawsuits will set you free -- or, at least, free sensitive information that you never wanted to see the light of day.

That’s the case for Google as the press pores over a transcript of court proceedings from a copyright suit filed by Oracle. The suit accuses Google of using Oracle's Java software to develop Android without paying for it.

To Google's supreme chagrin, we now know it paid Apple a billion dollars in 2014 to make sure its search function remained the default setting on all iOS devices.

As has been the case on PCs for years, such default settings are coveted by Google and its rivals because they know that most people don’t have the motivation or technical wherewithal to change them. The fresh disclosure reveals exactly what this privilege is worth to Google, and how much Apple profits from the partnership.

advertisement

advertisement

The billion dollars is apparently the result of a revenue-sharing agreement between the search giant and Apple. According to an Oracle lawyer, the companies agreed to a 34% revenue share at one point, but it’s not clear which company got which part.   

We also now know that Android has generated $31 billion in revenue -- and $22 billion in profit -- since Google bought the mobile operating system about a decade back.

All that green comes from ads that Google runs on Android devices and revenue from its Play app store. 

In the words of one Oracle lawyer, the numbers demonstrate the “extraordinary magnitude of commerciality” of Google’s mobile business.

This isn’t the first time we’ve heard the $1 billion figure. Morgan Stanley analyst Scott Devitt said as much in a report released back in 2013. But the revenue split and Android’s performance are both revelatory.

Ironically, Google’s lawyers tried vigorously to prevent the financial information from being published online, and retrievable via a quick Google search. The court documents have since been taken off the Web.

Next story loading loading..