Google hints at huge income from apps - Mobile World Live

Google hints at huge income from apps

19 OCT 2012

Google has given its first hint of how much revenue it is generating via its Google Play apps store.

The search giant revealed in its Q3 earnings this week that revenue from its mobile businesses is coming in at US$8 billion a year (annualised run rate).

The figure represents more than a three-fold increase on the US$2.5 billion figure given by the firm a year ago. However, Google noted it is now including sales of apps and other digital content made via Google Play in the total – as well as income generated from mobile advertising.

“This time last year, I announced that our run-rate for mobile advertising hit US$2.5 billion. That seemed like a pretty big number even for Google. But now we have built up additional mobile revenue from users paying for content and apps in Google Play,” explained Google CEO Larry Page.

On a call with investors, CFO Patrick Pichette said that the US$8 billion includes gross revenue from media sold via the Google Play store and money made from app sales – but noted that the “vast majority” of the US$8 billion still relates to mobile display ads.

“In the case of Google Play, it’s important to note from a modeling perspective that everything that’s content [books, movies etc.] is on our books on a gross basis, and everything that is tied to apps is booked on a net basis – but it’s still a huge number in all cases,” he added.

Google said last month that it now offers 675,000 apps and games via Google Play and had surpassed 25 billion app downloads.