Ad sales for Google are in trouble if others follow Amazon’s example.
Amazon.com Inc.’s Kindle Fire uses Android, a mobile operating system designed by Google Inc., but users may not know it because it doesn’t feature any of the Mountain View, Calif.-based search company’s apps. Those apps include Gmail, Google Maps and YouTube.
Google’s mobile advertising is one of the company's fasting-growing markets and is projected to reach $20.6 billion in 2015, a jump from its $3.3 billion in 2010, according to Bloomberg. Because mobile traffic is shifting to apps rather than mobile browsers, the search giant’s mobile-ad revenue could suffer if others eliminate its apps like Amazon has with the Kindle Fire.
“The Fire may be the best Android tablet out there, even though it’s the least Android-y of all of them,” Noah Elkin, an analyst at New York-based research firm EMarketer Inc., told Bloomberg. “The Google experience is very much in the background.”
Still, companies are activating large amounts of Android devices that feature Google’s mobile apps.
Verizon Communications Inc. activated 15 million Android phones and 10.8 million iPhones in 2011, according to Mashable.
The company’s strong smartphone sales will not likely cross over into the first quarter, Fran Shammo, executive vice president and CFO of Verizon, told Mashable. Verizon sold more higher-margin Android devices than iPhones.
Another app Amazon has scratched from its tablet is the Android Market.
The Android Market hit 11 billion downloads by the end of the fourth quarter last year, according to TechnoBloom. That means that with the 250 million total Android devices activated last year, each device has 44 mobile apps from the Market.
But it isn’t app sales that bring the company revenue.
It’s still advertising from Google’s search engine that brings in the most money, according to the Bloomberg article. Less than half of Google’s $5.8 billion in mobile revenue comes through mobile apps, but if even 10 percent of mobile app-related sales are lost because of Amazon’s Kindle Fire, the company would lose less than $300 million.