Google Inc (GOOG) Android Users: What Are These People Worth?

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The fact that Google Inc (NASDAQ:GOOG) and its Android operating system are doing big things is no surprise to anybody at this point. While nobody knows what the future holds (we discuss this here), it is safe to say that the search engine giant is looking for big things out of its operating system.

Larry Page and Eric Schmidt, Google FoundersAsymco recently took the time to analyze globs of data in an attempt to learn more about what a Google Android user is worth. Here is some information from the report to set the table:

“Excluding Motorola, Google’s gross margins have dropped for six out of the last nine quarters. They peaked at 65.8% in early 2011 but have now dropped to 60.4%. Including the drag from Motorola they are down to 57%.”

As you can see, things are slowly declining for Google Inc (NASDAQ:GOOG) as its gross margins have declined during six of the past nine quarters. While this doesn’t mean the company is tanking, it is something to keep an eye on.

As the report moves forward, it begins to discuss the finer details of the Google Android operating system including how much each user is worth.

To fully understand the data, you may want to visit the Asymco report to take a closer look at the included graphics.

The following information gives a better idea of what is going on:

“The elephant in the room is indeed the effect of 900 million activated Android devices (with 1.5 million added each day.) These nominal billion devices are a new channel that could be said to have doubled Google’s addressable market in only the last three years. The effect of this doubling is perhaps partly underlying the top line growth shown above.

I placed Google’s performance alongside Microsoft’s for a reason. Since Microsoft has had precisely zero benefit from any new mobile channels, and since its software is broadly tied to business spending (as is Google’s), we can consider Microsoft as a control in what baseline non-mobile growth could be. From Q2 2010 to the present (the Android epoch), Microsoft’s consolidated revenues grew by 24% (31% if we exclude Windows).  In contrast, Google’s advertising revenues (excluding Motorola and licensing) have increased by a more robust 83%.

So it’s possible that mobile contributed to top line growth. The effect could be 50% over three years. The downside is of course that this comes from a doubling of the channel. The new channel is therefore half as engaging. In terms for bottom line, the effect would be seen as more subdued growth. Overall, income increased 32% for a nominal doubling of usage.”

That is a lot of information to take in, but if you have any interest in Google Inc (NASDAQ:GOOG), including its operating system, it is well worth a second look. Reports like this go a long way in showing how certain companies have been performing on a deeper level.

The Google Inc (NASDAQ:GOOG) Android operating system is a top performer, and this data shows a little bit about where things stand right now.

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