Each of us is $6 in Google’s Pocket; $10 in 2012

We all know that Google doesn’t make Android out of the goodness of its heart; it’s trying to make some money on the deal. And since it’s not selling the OS, that money comes from mobile advertising. Now, an analyst has made a calculation of just how much ad revenue Google is getting from the average Android user, and made a prediction about how that will increase next year.

Analyst Gene Munster of Piper Jaffray figures that Google generated $133 million  from 22.5 million Android users in 2010, good for just under $6 per user per year. By the end of 2012, he’s predicting revenue will rise nearly tenfold to a heady $1.3 billion from six times as many users, which means the average revenue per user would rise to nearly $10.

We're giving stuff away to help celebrate our tenth anniversary. Are you in?

One of the reasons he expects the revenue per user to rise is Google’s renewed focus on the Market:

“We expect Google’s revamped Android Market will enable users to download apps on Android more easily and could increase monetization per user from in-app advertising over the next two years.”

This is all still chump change compared to Google’s advertising as a whole, which generates $25 per user, and it’s likely that some portion of the growth of mobile ad revenue will be at the expense of non-mobile ad revenue. On the other hand, as smartphone use continues to take off, mobile activity is going to cannibalize non-mobile activity regardless, so it’s smart of Google to get what they can from that trend.

And the prospect of a billion dollars a year means Android users can be assured that Google will continue to put a lot of resources into the OS they “give away for free.”

Sources: Search Engine Land, The Smartphone Wars, Mobile Marketer

  • Mark

    I’ll cut you guys a deal, how about each of you just put $3 dollars in my pocket? 50% off, who doesn’t love that?

    • Mike

      @Mark: Do you accept PayPal?

  • allie

    While I dislike ads, I don’t begrudge Google making a healthy profit because I like and use their services and products.

  • Just wait until Google owns the mobile market outright and then moves in for the Microsoft kill by transferring Android to PC’s as well