Why Google is wary of Samsung's growing power
Samsung's dominance in the smart-phone market has raised some questions about whether it will renegotiation the terms of its arrangements with Google, hurting the search-engine company's mobile-ad business.
Google is concerned with how Samsung's growing power might affect their partnership. Here, a man walks by a Samsung advertisement in Seoul, South Korea.
Kim Hong-Ji/Reuters/File
Samsung's success may have Google worried.
Executives at the search-engine giant are concerned about Samsung's rising dominance in the Android market, according to The Wall Street Journal. The South Korean company’s success could lead to a renegotiation of its arrangement with Google or otherwise undermine its mobile-ad business.
Google may be trying to save itself from an ascendant Samsung with its recent acquisition of Motorola Mobility, which makes Android-based smart phones and tablets, according to the Journal.
Samsung has risen to the top of the smart-phone market over the past year, reporting a $8.27 billion profit in its Q4 earnings of 2012. Galaxy products outsold iPhones for most of 2012, dominating the global market.
While Google had strong earnings in the fourth quarter, it is struggling with the decline of desktop searches and the rise of mobile searches, where Google makes less money. The cost-per-click that advertisers pay Google decreased by 6 percent from the fourth quarter in 2011, though it increased by 2 percent in the third quarter of 2012.
James Kendrick of ZDNet says Google should be concerned about Samsung, and so should its partners. Why? Because Samsung is the only Android maker that matters.
“Samsung’s sales of both smart phones and tablets are far ahead of not just other Android players, but also of the entire Android ecosystem,” Mr. Kendrick writes. “Samsung is Android.”
