Why making $31 billion off Android sucks for Google

by: John DyeJanuary 21, 2016

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So the news just broke that Google has generated a revenue of $31 billion and $22 billion in profit from the Android since it acquired the operating system back in 2005. This is incredible news, because the long-standing narrative was that Android wasn’t making very much money for the company. In fact, Google has a history of being harassed by Wall Street for throwing money at projects that, while interesting, aren’t very profitable. So while investors are cheering, why is Google sulking in the corner with its arms crossed?

The reason is part and parcel with the way we found out about this $31 billion figure. Oracle currently has Google entrenched in an on-going legal battle. The case has its origins all the way back in 2010, when Oracle claimed the search giant violated its copyright by using Java APIs in Android. In 2014, the court ruled that API’s could, in fact, be copyrighted, and Google immediately escalated the case to the Supreme Court. This past summer, the Supreme Court upheld the ruling, and in many ways this looked like a killing blow for the Android owner’s side in the case, with Oracle pursuing damages of $1 billion.

Google-logo-aa16x9See also: Supreme Court rejects to hear Google’s appeal in Oracle fight over Android10

So when Annette Hurst, Oracle’s attorney, made public the $33 billion figure in court, Google acted quickly, asking the federal judge to redact and seal the public transcript. Their claim is that the information was extremely sensitive, and that Hurst inappropriately disclosed content from documents marked “For Attorney’s Eyes Only.”

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Investors all over the world are rejoicing at the figure, which seems to prove Android’s viability, but this puts Google in a very awkward spot. See, the damages that Oracle will potentially be awarded in this case are directly related to how much money Google made using their Java APIs. If the $33 billion in revenue figure is true, then the company could wind up paying out well over $1 billion.

Google, then, has to make a tough choice in how they move their court case forward. If they argue that Android isn’t as profitable as Oracle calculated from internal financial documents, then investors are going to be miffed. However, if they accept Oracle’s calculations, they weaken their own case and open the door for Oracle to ask for much higher damages.

What are your thoughts regarding this debacle? How do you think Google should proceed? Let us know in the comments below!

Next: Best Android phones (January 2016)

  • AbbyZFresh

    AND they have the EU and Russia to worry on top of that.

    Microsoft got it easy last decade compared to what Google’s going through right now.

    • brenden gonzalez

      Google should tell eu and Russia okay I agree a pull all Google play services and brake them and blame it on the EU and Russia and make consumers make their government drop the bullshit claims

      • Toukale

        I always ask myself this question whenever I see someone post comments like this. How do you get to that conclusion? Who do you think would get hurt by such a decision? Google did try a stunt like that with China. When they realize what that cost them, they are now doing everything to try to get back in China. Tons of companies would filled that void and Google would lose money and valuable data.

        That’s the problem with fanboys on the web, everything is always a zero sum game that always cloud their judgments. At least that’s what I keep telling myself so I don’t lose faith.

  • Joel Briza

    Isn’t Java a free programming language?

    • Kyng

      It was until Oracle decided they want a piece of Android. This sets precedent for anyone using Java api… However Google will be using their own starting with N, and like most else it will be open source. Oracle will get a very good pay day, but shot themselves in the foot long term.

      • Abcd

        It’s actually the Java APIs. Android actually uses Java VM (Dalvik) to run Android, or used to. This what the lawsuit is about and not using Java in general.

        • Kyng

          A number of apps use Java api, and have never had to pay until the Supreme Court decision. Not to mention web pages and the like. This could throw the web into chaos….or push them all to Google’s new api’s.

      • Avieshek Rajkhowa

        I actually read, Google would be using Open Java Api for Android N (9to5google)

  • eddnav

    Oracle is a piece of shit company, should’ve disappeared a long time ago. Fucking corporate buffoons.

    • Steve Brain

      Bring back Sun!

  • Shashwat Thakur

    I think investors are another story, Google should better find some way.

  • 404

    i think google should depend on investors

  • Wikipedia: “Don’t be evil” was the corporatemotto (or slogan) of Google.

    Yeah, right! Of course they’ll have to pay when they’ve violated Oracle’s rights.

    • Just sayin’

      I guess you’re not a programmer. The implications of an API being copyrightable are tremendous and very dangerous for the industry. It’s the dumbest decision since using a toaster as a bath toy.

      Google did nothing wrong. And Oracle are just shooting themselves in the foot. Library writers will stop developing for Java if they have to pay Oracle every time they want to write a library with a similar API. If the libraries dry up, then so do app developers.

      The other problem, of course, is if an API is copyrightable then it can be argued that similar APIs are derivative works, so APIs in different languages may also be “breaking the law”. Tell me, how many different ways can you remove an object from a container?

      In C++: void std::list::remove (const value_type& val);
      In Java: boolean AbstractCollection::remove(Object o)
      In Python: list.remove(x)
      In C#: public bool Remove( T item )

      Yeah, those pass by reference arguments are awfully similar, aren’t they? Java ripped off the STL and Oracle should be sued.
      And C# ripped off Java, so Oracle should sue Microsoft. I won’t even mention Microsoft’s J++. Oracle might end up owning Microsoft.

  • aaloo

    Android was brazenly copied. Google should shut up and pay the original inventors regardless of how sucky Java API themselves are.

    • Exare

      This comment hurts to read :'( It’s full of bad perspective and misinformed accusations that it makes me sad. You should do a little more research before being so quick to point fingers ;)

  • Alexander Lerche

    Google better fucking destroy Oracle!

  • WhiskeyJoe

    google made android suck now android bites them in the ass!poetic justice!oh yeah when a company owns something you still need to ask permission and follow there use guidelines so no it wasn’t free that’s what the judge said