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Report: Google Looking to Grab more Android App Revenue

June 28, 2013 - Written By Alexander Maxham

Google is reportedly in talks with carriers to get even more revenue from the Google Play Store. This is according to Macquarie analysts Eugene Jung and Ben Schachter. Jung is reporting that Google is trying to increase their Play Store revenue in Korea. Schachter also believes that this is happening outside of Korea. What’s interesting is that LG and Samsung are both in Korea.

Currently, Google’s revenue is 70/30. Which means Google only gets about 30% of the revenue from each app. But of that 30%, Google only keeps about 5% for itself. The other 25% all belongs to those carriers that we have a love/hate relationship with. Jung says that Google is wanting to keep 15% of Play Store revenue, and give the rest to the carrier. Which isn’t a huge difference, and developers wouldn’t even notice it as it would still be on a 70/30 scale.

Schachter is stating that he believes Google Play brought in about $350 million in revenue in May alone. How’d he get that number? From using data from Distimo, the app analysis firm. That would be about $17.5 million at Google’s current revenue share. With the new 15% that they are pursuing, that would put them at $52.5 million in revenue.

Now if Google can successfully negotiate with carriers to keep 15% of Play Revenue, Schachter believes that Google could bring in about $500 million in Play store profits in 2014. For Google, that’s not a huge money, that’s just chunk change. But for Android that is a good thing. Android isn’t making a ton as a standalone product, but that’s what open source is all about.

It’s good that Google is working to take that percentage from Carriers instead of Developers. They could easily change the revenue sharing so that developers get 60% instead of 70% and carriers would never know. But taking it to the carriers is a much smarter move on Google’s part.