Generally it seems that search engine giant Google is more than pleased to receive the mobile advertisement revenue from Samsung thanks to the South Korean mobile manufacturer 40 percent share of the Android OS powered phones being sold world wide. However, there is another side to this picture and according to The Wall Street Journal Google executives actually fears the growth of Samsung. The major reason behind their concern is that one day Samsung could exploit its dominance to cut their profits from search and mobile ads by bringing them to the negotiation table and asking for more.
“Google executives worry that Samsung has become so big—the South Korean company sells about 40% of the gadgets that use Google’s Android software—that it could flex its muscle to renegotiate their arrangement and eat into Google’s lucrative mobile-ad business, people familiar with the matter said.”
The Wall Street Journal claimed that according to “people familiar with the matter,” Google executives are now shifting their focus from Samsung to other companies like HP and HTC so they can also produce high end Android-based devices that can give the products of the South Korean company a good run for their money. The report also says that Android chief, Andy Rubin, has talked about the situation with executives from Google when they gathered at a recent event. During the meeting, Rubin portrayed Motorola as “a kind of insurance policy against a manufacturer such as Samsung gaining too much power over Android.”
“Mr. Rubin also said Samsung could become a threat if it gains more ground among mobile-device makers that use Android, the person said. Mr. Rubin said Google’s recent acquisition of Motorola Mobility, which makes Android-based smartphones and tablets, served as a kind of insurance policy against a manufacturer such as Samsung gaining too much power over Android, the person said. Google said Mr. Rubin wasn’t available for an interview.”
This clearly shows that Google is taking serious measures to overpower the dominance of Samsung in the Android market because, “Samsung in the past has received more than 10% of such revenue, one of the people said. Samsung has signalled to Google that it might want more, especially as Google begins to produce more revenue from apps such as Google Maps and YouTube, another person familiar with the matter said.”
Source: 9to5Google
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