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Google Play Store is Certainly no Child’s Play When it Comes to Making Money

November 19, 2013 - Written By Cory McNutt

It is no secret that a few years ago the iTunes/App Store sold a lot more apps and made a lot more money than the Google Play Store, but as time went on the Google Play Store grew, was refined, and, did I say grew.  If you go into the Play Store now and look around, you can see just how “enormous” the Play Store has grown – new categories, new format, in depth descriptions, and easy to search and get around the website.  There are over 1 million apps for downloading, tens of thousands of songs, and thousands of books, movies, and TV shows.

Each time someone buys an app, Google gets a cut, as well as money from the advertising – Google is all about advertising.  Google does not report how much it makes from its Play Store but Barron’s analysts have estimated it to be about $1.3 billion on sales of $4.2 billion.  With the rapid growth of the Android operating system, analysts believe that by the year 2017, Google’s Play Store profits could rise to $5.2 billion. Smartphones sales continue to increase, especially in the emerging nations, and Android now commands over 80-percent of the worldwide market – and everyone of those devices need apps.

Money from Google Play

Remember we said that Google is all about advertising and below is a chart showing estimated advertising revenues earn because of the Play Store:

Money from GAAP Google Play

All of this means that investors are being encouraged to purchase Google stock – Citibank’s Mark May said:

This year has been a breakout year for Google Play.

In CY13, we estimate that an average of 909mn installed Android devices will generate on average $4.59 per device in Google Play bookings, which will result in $4.2bn in total bookings and $1.3bn in gross revenue for Google after paying out 70% of bookings to app developers.

All of his data leads May to raise his estimates of Google’s 2014 Earnings Per Share (EPS) from $47.75 to $47.86 and their 2015 estimated EPS from $55.44 to $55.65. Let us know in the comments or on Google+ if you are a Google investor and how much you might spend in the Google Play Store during the year.