Google's Mobile Strategy is Paying off

By Andrés Cardenal - May 14, 2012 | Tickers: AMZN, GOOG, ORCL, YHOO | 0 Comments

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ComScore has released its Mobile Metrix report, which examines mobile media usage across both apps and mobile web browsing, and the data shows that Google (NASDAQ: GOOG) is being quite successful in mobile traffic. A nice victory for Google and its management team, which have taken considerable heat through the years for deploying resources and energy into Android, without a clear time horizon for profitability.

According to the numbers from comScore as reported by Tech Crunch:

• Google sites led as the top property on iOS, Android and RIM devices, reaching 96.9% of the U.S. mobile audience, followed by Facebook (NADSAQ: FB), Yahoo (NASDAQ: YHOO) sites, and Amazon (NASDAQ: AMZN) sites.
• As far as which apps led the way, not surprisingly, built-in system apps came out on top; depending on the platform, the App Store or the Android Market holds the top spot, followed by either Google Search or Maps.
• On the iPhone, iTunes was the top app, with 99.9% reach, and was followed by Google Maps, at 91.2% reach. Facebook, meanwhile, was in the #3 spot, with an 80% reach.
• On Android, Google Play store was #1 (93.2% reach), followed by the Google Search app (84.1%), Maps (74.5%), Gmail (71.4%), and then Facebook (68.9%).

Projects like Android require many years of investment and there is no easy way to analyze their profitability horizon. Google doesn't disclose data for Android in particular, but Reuters reports that the mobile operating system, which was announced in 2007, lost money in every quarter of 2010.

Reuters says it got this information from U.S. District Judge William Alsup, who is investigating Oracle's (NASDAQ: ORCL) claim that Google violated its copyright to parts of the Java programming language.

Alsup had sealed an internal 2011 Google document which contains profit and loss numbers for Android in 2010. However, the judge read aloud certain portions of it in court on Thursday. The judge did not disclose the specific loss figures for Android, but said it lost money in each quarter of 2010. "That adds up to a big loss for the whole year," Alsup said.

When Google announced its controversial new share structure, which guarantees the control of the founding team in the company's voting shares, Larry Page justified the decision by explaining that the company is focused on long-term opportunities instead of short-term profits, and management wants to make sure they can continue in that way without being affected by pressures from outside shareholders.

We have protected Google from outside pressures and the temptation to sacrifice future opportunities to meet short-term demands. Long-term product investments, like Chrome and YouTube, which now enjoy phenomenal usage, were made with a significant degree of independence.

Android could certainly be included in the same group as Chrome and YouTube, those long-term investments that require time and patience before providing tangible results. Even if profitability numbers for Android are not disclosed, the data shows that it has given Google a tremendously valuable leadership position in mobile.

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