It was a long time ago, back in 2005 actually, when Google pulled a fast one and acquired Android for an estimated cool "$50 million dollars, a good hunk of their acquisition money that year, the whole lump being somewhere around $130 million." Recently at a panel for the 16th annual Stanford Accel Symposium, the Vice Pres of Corporate Development at Google David Lawee, said that the purchase of Android was Google's "best deal ever."
The most important reason, the more lucrative one, is that with Android and its tie-ins with Google's ad department. Lawee says that the ads are currently making the ridiculous sum of somewhere around $1 Billion dollars a year. Part of this success is also being credited to another acquisition by Google, the ad company AdMob. The price paid for the ad startup is somewhere around $750 million, but the price seems to be paying off with such a high profit.
Lawee also said that in the beginning after first purchasing Android, he was very skeptical about where it was going to go " I saw this guy(Andy Rubin, founder of Android) in my building for two years, walking his dog, and i was like, I hope this guy does something."