Oracle, Google and the case of the extra $1 billion
By Dan Levine
Google turned heads on Wall Street last October when it announced that Android smartphone software was generating mobile ad revenue at an annual run rate of $2.5 billion.
But if you believe Oracle, even that strong figure understated the lucre by over $1 billion.
Oracle is in a heated patent battle with Google for allegedly infringing Java, which Oracle acquired when it bought Sun Microsystems. In a court filing on Tuesday, Oracle noted that more than 700,000 Android-based devices are activated every day.
“Each day’s worth of activations likely generates approximately $10 million in annual mobile advertising revenue for Google,” Oracle said in the filing.
The math isn’t too difficult here – it puts Android’s annual run rate at $3.65 billion, not the $2.5 billion Google previously disclosed. Oracle didn’t say in its filing whether its $10 million per day number comes from Google’s own documents that were produced in the lawsuit, from a theory developed by Oracle’s damages expert, or from something else entirely. Oracle didn’t respond to an email asking for comment, while Google referred back to the $2.5 billion figure and otherwise declined to comment.
With Google set to report earnings on Thursday, it will be fun to see if it deigns to confirm Oracle’s estimate, refutes it, or say nothing at all.
Here’s something else to keep in mind: Google’s $2.5 billion figure covered “mobile ad revenue,” which likely includes dollars from searches on Android phones, as well as from queries on Apple iPhones (because of Google’s deal making it the default search engine on the iPhone). Yet Oracle’s estimate is tied to Android activations. So if Oracle is right, it could mean the total Android ad revenue is even higher.