Friday, September 30, 2011 at 5:33 pm.

Why the Kindle Fire is actually good for Google

Jeff BezosOne of the prevailing opinions about Amazon’s new Kindle Fire tablet is that it’s bad for Google. That is primarily because it’s taking some control of Android away from Google, further fragmenting the Android platform, and will probably do better in the market than “real” Android tablets, like those made by Motorola, Samsung, and HTC.

That is a valid argument, especially when plotting out Android’s longer-term progress. But here’s a different one, based less on strategy and more on money.

Google still makes almost all of its profit from search and display advertising on the web. It does not make money from selling Android tablet hardware (pending its Motorola acquisition), nor from licensing the free Android OS, nor does it make any substantial amount of money from selling apps through Android Market, movie rentals, etc.

  • So the Kindle Fire is actually good for Google if it gets people to use the web — which, basically by default, includes ad-supported Google services like Google Search, GMail, and YouTube. Especially if it’s incremental to PC-based and mobile web usage. (Remember, one of the core principles behind Android was to make a variety of new, affordable devices possible that get people using the web when they weren’t before.)
  • And it’s also good for Google if Kindle Fire app makers sign up Google/AdMob to power their in-app advertising — which, as Android publishers, they likely have considered or are already doing.

If Amazon were to block or supplant Google’s profit-driving businesses like search and display advertising, that could be an actual problem for Google. (And you’d be an idiot to count Amazon out of any future marketplace.)

But in the foreseeable future, as long as Kindle Fire users are still doing their web searches with Google, and as long as the Amazon Silk browser still displays Google’s ads, it’s still good for Google. Probably not as good as if they were using a Motorola Xoom, but better than not using the web at all.

Also: Amazon’s amazing Kindle growth chart