Online classifieds firm Quikr raises $32M from Warburg Pincus, others

The online local search segment in India continues to garner significant investment. Still haven't seen the long expected consolidation.


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Anand Rai, VCCircle
May 22, 2012


This is Warburg Pincus’ first Internet-related investment in India in more than a decade, after Rediff.com.


Quikr Mauritius Holding Pvt Ltd, the parent company of Quikr India Pvt Ltd which runs online classifieds site Quikr, has raised $32 million in its fifth and also its largest round of funding, led by private equity firm Warburg Pincus. Existing investors Matrix Partners India, Norwest Venture Partners and eBay Inc also participated in the latest round that took the total funding into the company to $50 million or close to Rs 260 crore – making it one of the heavily funded consumer Internet firms in India


According to the company, its platform is used by more than 17 million unique users and small businesses across 83 cities, on a monthly basis. Its online and mobile platforms provide local destinations for each of these cities. People can go to their local Quikr platforms to sell, buy, rent or find products and services across 165 categories, such as electronics, cars, bikes, real estate, services, jobs, education and entertainment, among others.


The company generates revenues from three defined revenue streams – advertising, premium listing and providing lead generation for small-scale businesses.


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TaxiForSure raises Series A funding from Accel, Helion & Blume Ventures | Mergers, Acquisitions, Private Equity, Venture Capital, Investment Banking

The online car rental space has been hotting up with several startups entering the segment with funding from both angel investors and VCs. I honestly struggle with the business case, ability to effectively manage in this highly fragmented and unorgansied segment and ability of these players to compete with the scale and organisational set-up of the likes of Megacabs, Meru, etc.

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Anand Rai, VCCircle
May 21, 2012


This is third online taxi booking service provider to raise Series A funding in the past two months.


Serendipity Infolabs Pvt Ltd, that runs the online taxi booking site Taxiforsure.com, has raised an undisclosed amount in VC funding from Accel Partners, Helion Venture Partners and Blume Ventures. 


TaxiForSure acts as an aggregator of car rentals and taxis in India and its offerings include local point to point taxis, airport transfer taxis, local packages and outstation packages. Besides regular taxis, it also provides booking for luxury cars

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HBR : Hire for Passion, Not Just Talent

Hire for Passion, Not Just Talent - Management Tip of the Day - May 25, 2012 - Harvard Business Review

Bump's Super Popular App Just Got A Million Times Cooler With Its Latest Update

Innovative!

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Kevin Smith, Business Insider
May 25, 2012

Popular iPhone/Android app Bump has racked up over 75 million downloads.

Today the it's been updated allowing you to share photos from your phone to your computer by just tapping your phone against the space bar. 

Pretty neat.

Here is what to do:

• Download the free Bump app for iPhone or Android.

• Using the Bump app, select the photos you want to share.

• Head to "bu.mp" using your web browser and tap your phone against the space bar. That's it! Your photos magically transfer to the computer.

For the uninitiated here is what the phenomenally popular Bumps is about http://bu.mp/company/

What you can share via bu.mp - Your own contact information, including your social network pages; photos; and other people’s contacts

Apple employee claims Steve Jobs would have 'lost his mind' over Siri & Apple embarrassed by Siri

Though I still strongly believe AI and voice based input is definitely the next wave

by AppleInsider Staff
May 25, 2012


A new report quotes a former Apple employee as saying that people at the company are "embarrassed by Siri" and late Apple co-founder Steve Jobs would have "lost his mind" over the feature's performance.

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In-app Subscriptions in Google Play

Interesting to see Google focusing on a monetization model beyond advertising ! In-app seems to be increasingly driving monetization on most app stores

Posted by Dirk Dougherty on Android Developer Blog

24 May 2012

[This post is by Ibrahim Elbouchikhi, Product Manager on the Google Play team. —Dirk Dougherty]

We launched In-app Billing on Google Play a year ago to give developers more ways to sell and engage users over the lifetime of their apps. Since the launch, In-app Billing has been extremely successful in helping developers monetize their apps through try-and-buy, virtual goods, upgrades, and other popular business models. Today, 23 of the 24 top-grossing apps in Google Play use In-app Billing, and the total revenue generated from in-app purchases exceeds revenue from traditional app purchases.

We’re now taking In-app Billing further by adding another important business model — subscriptions. Starting today, developers can use In-app Billing to sell monthly or annual subscriptions from inside of their apps. All subscriptions are auto-renewing, for every app and game and every type of subscription product. Developers just set the price and billing interval and Google Play manages the purchase transactions for them, just as it does for other in-app products and app purchases.

For users, Google Play provides a familiar and convenient purchase experience, highlighting subscription details such as price and billing interval before continuing with purchases. After the transaction, Google Play manages recurring billing and keeps users informed of new charges, sending them an email with each renewal. At any time, users can visit My Apps in the Play Store app to view their subscriptions and cancel any subscription as needed.

While making it easy for developers to offer a great purchasing experience, our subscriptions are also designed for flexibility. Developers can use them to monetize premium dynamic content such as journals and magazines, but they can also use them to sell access to bundled products, game levels, music and video content, value-added services, or any other digital content.

Building on Google Play’s strength as a truly cloud-connected experience, developers can offer users the ability to carry their subscriptions across multiple properties, services, or campaigns. To make this easier, we’re introducing an HTTP-based publisher API through which enterprise-scale backend servers can validate or cancel subscriptions. Using this API, for example, developers can extend access from their Android apps to their web properties, based on subscriptions that are purchased on Google Play.

In the coming days, several developers will be launching apps with Google Play subscriptions and we expect many more to follow. Glu Mobile is launching updated versions of its top Android titles, including Frontline Commando, offering subscriptions through custom VIP currency packages. "We're using Google Play subscriptions to offer consumers a compelling value and a single currency which they can use across Glu’s most popular titles” says Niccolo de Masi, CEO of Glu. “We're excited to bring these capabilities to our Android users and we believe that Google Play subscriptions will fuel further growth in our business."

If you’re a developer, you can get started with subscriptions right away by reading the In-app Billing documentation and downloading the updated sample app. If you are already using in-app billing, you’ll find that adding support for subscriptions is straightforward and involves only minor changes to your code.

You can publish your updated apps and subscription products as soon as you are ready. We’ve already rolled out client support to most Android devices worldwide, so any user with Google Play 3.5 or higher installed can buy subscriptions starting today.

We’re looking forward to seeing how you use subscriptions in your apps!

Facebook to acquire browser maker Opera? Maybe

Likely and makes a lot of sense in my view for Facebook given their increasing mobile ambitions and traction. I have always believed the one often less mentioned ecosystems, increasingly mobile, is being built by Facebook and its quickly pulling together the elements to power it e.g. search, apps and now potentially a browser. Their efforts get added impetus with the rise of HTML5 which in itself threatens to disrupt mobile ecosystems as they exist today. It’s not a question anymore of if it will happen but more a debate of when I will happen.

Other developments to buttress such an acquisition arise from the fact that browsers today, on account of being the entry point to the cloud/internet, are morphing into OS themselves a la Google Chrome.

A Facebook browser would include default menu bar plugins, further permeating Facebook into users’ general web experience. A custom browser would be a significant step toward Facebook becoming your web, as opposed to just an Internet site you visit and service you use. Facebook has struggled to penetrate mobile use as deeply as many think it should be able to — and will need to in order to sustain long-term growth.

Link to full article

ROBIN WAUTERS, The Next WEB

 25TH MAY 2012 by 

Juicy rumor coming from Pocket-lint this morning: Facebook is reportedly eyeing a takeover of desktop, tablet and smartphone browser maker Opera Software.

Citing an unnamed source, Pocket-lint says the social network juggernaut is considering an outright acquisition of the Norwegian software company to accelerate a move onto the battlefields where the browser wars between Microsoft, Google, Mozilla, Apple and since recently Yahoo are being fought.

But not so fast. First of all, we asked Opera Software for an official response on the report, and a spokesperson declined to comment.

Update: Facebook also declined to comment.

One source close to Opera, however, tells us two interesting things:

1) Opera Software management is talking to potential buyers right now.

Currently listed on the Oslo Stock Exchange, the company’s leadership is said to consider becoming part of a larger privately-held or public company rather than trying to keep growing the business independently.

2) We’re told that there’s currently a hiring freeze at Opera, which is a surefire sign that something big is about to happen – or at least that Opera wants something big to happen.

We’re trying to get more sources to corroborate these stories, but the above comes from a very solid source. Our source was unable to confirm whether Facebook was one of the potential acquirers, but said it “would make sense”.

Indeed, an acquisition of Opera could give Facebook a major boost if they decide to enter the browser wars for real (and they may eventually have to).

As the company itself admitted when it filed to go public, it has some issues monetizingmobile right now, and that’s where its users are increasingly heading to visit Facebook.

Facebook has long been rumored to be working on a full-fledged mobile operating system based on Android, and even its own (HTC-made?) ‘social’ smartphone.

Buying Opera would certainly make more sense for Facebook than to do it all from scratch, but for now this is almost all speculation. On to the facts:

About 270 million people use Opera browsers every month, the software companyclaims. Furthermore, more than 168 million people used the Opera Mini browser in March 2012, with a total of 117 billion pages served.

The company has deals with mobile device (and TV) OEMs and carriers worldwide.

Opera also just bought not one but two mobile advertising companies (after picking up AdMarvel back in January 2010).

Opera boasts more than 750 employees today and a strong executive team. Its chief technology officer, Håkon Wium Lie, is a pioneer in the Web field and a standards expert who is often described as the ‘father of CSS’.

Established as an independent company back in 1995, Opera expects to book roughly $50 million in revenue for the second quarter of the year. Its market cap currently hovers around $670 million.

That would make it an expensive purchase, but Facebook’s recent IPO certainly put the social networking company in a solid position to close major deals like an Opera Software acquisition. Let’s not forget it spent $1 billion to buy Instagram.

All this does not mean Opera will end up selling, and it doesn’t mean Facebook will be the buyer if they do. But for now, Opera execs are definitely talking to a number of different companies about what a deal could look like, our source asserts. Other likely suitors include search giants Yandex (Russia) and, yes, Google.

Bing Maps now using Nokia Backend services for Traffic and Geocoding

Nice! No comments on professional proprietary grounds.

Bing Maps Blog 

5/24/2012 

Last year, Microsoft announced a strategic partnership with Nokia in Mapping. Our two companies have spent a lot of time working together, sharing information and investigating better ways provide relevant mapping information to help you find and get to where you’re going more quickly. Today, we’re excited to announce another important phase in that partnership with the launch of Nokia powered traffic results, which are rolling out today in 24 countries on Bing Maps.

The following countries will see improvements through Bing Maps as a result of our use of Nokia services:

· Austria

· Belgium

· Brazil

· Canada

· Finland

· France

· Germany

· Greece

· India

· Indonesia

· Ireland

· Italy

· Luxembourg

· Mexico

· Netherlands

· Poland

· Portugal

· Russia

· Saudi Arabia

· South Africa

· Spain

· Sweden

· Switzerland

· UAE

· United Kingdom

· US

New countries with Traffic

São Paulo, Brazil

Johannesburg, South Africa

Moscow, Russia

Mumbai, India

Improved Traffic

We’re also improving our existing traffic coverage in the US to include traffic information for side streets in addition to freeway traffic information. See below for enhanced coverage in Seattle.

Seattle, Washington

In addition to these traffic improvements, Bing Maps will also start to use Nokia’s geocoding services in a number of countries offering improved directions.  This update, while not always visible to users, is another important milestone in our partnership to build the world’s best mapping platform using Nokia and Microsoft’s assets.

Thanks to our friends at Nokia for their dedication along the way. Together we have enabled a stronger Bing Maps experience and we hope Bing users in these respective countries reap the benefits of our partnership, notice an increase in address search relevance, and enjoy the addition of traffic information - especially those of you in the US who are adventurous enough to travel during the Memorial Day holiday! /jealous sigh

Vodafone India Q4'12 & FY12 Results

Source : Vodafone Investor Relations Reports


Financials (FY12 unless specified otherwise)

• Revenue = GBP 4.3 Bn (FY11 = GBP 3.9 Bn). Revenue share @ 20.6% on 31Dec11
• Data Revenue (% Total) = 13% (FY11 = 11%) with Messaging comprising 37% of this revenue
• EBIDTA (%) = 26.3% (FY11 = 25.6%)
• Operating Profit (%) = 1.4% (FY11 = 0.4%)
• Operating Free Cash Flow = GBP 531 Mn (FY11 = 433 Mn)
• Capex = GBP 805 Mn (FY 11  = GBP 870 Mn)

Operational (Q4'12 unless specified otherwise)

• Subscribers = 150.5 Mn
• Pre-paid = 95%
• Churn = 78% (Overall), 20% (Post-paid), 81% (Pre-paid)
• Total Voice minutes = 142 Bn (Q3'12 = 133 Bn)
• Outgoing  Rate = INR 0.6/min
• ARPU (INR) = 179 (overall), 735 (post-paid), 151 (pre-paid)
• Network sites = 110k. 3G sites = 12k
• Data users = 35 Mn. Q4 data revenue +32.2%, continues to be driven by 2G

As always related ppt is great read sections on Vodafone 2015 and the Vodafone Way @ http://www.vodafone.com/content/dam/vodafone/investors/financial_results_feeds/preliminary_results_31march2012/p_prelim2012.pdf

Turkcell combines m-wallet and location services

NFC + Location potentially a potent combination 


Link to article


James Middleton, Telecoms.com
April 16, 2012

Turkish carrier Turkcell and local bank Akbank have announced a partnership to introduce an NFC-based mobile wallet service incorporating location-based elements.

The consolidation of Turkcell’s mobile payments and LBS initiatives means that subscribers holding Axess cards can pay for goods via Turkcell’s Cep-T Cuzdan m-wallet. Akbank is using LBS functionality to push out coupons and other marketing to users based on their current location.

Akbank’s executive VP in charge of payment systems, Mehmet Sindel, said that the company aims to integrate mobile phones with payment systems and said: “We completed the first stage of our project that is enabling shopping with Axess cards by registering them with users’ mobile phones in previous months through our collaboration with Turkcell. Today, we never leave our mobile phones behind when we walk out the home, and we let our friends and people around us know our location through social media on our mobile phones. We have now launched the first application in our country which combines NFC technology and location based services. By doing so, we will enable our card holders to make full use of the advantages of mobility, and with location based marketing we can easily alert card holders to notice the opportunities around them.”

Android economics : Part-2 - The Android Income Statement

Link to article

Interesting myriad of payout with an endeavour to keep the whole value chain incentivized !

Horace Dediu, Asymco
May 14, 2012

This is a continuation of the “Android Economics” series of posts. It deals with how revenues and costs are categorized for Android.

The following diagram shows an approximate representation of what Android’s “Income Statement”[1] would look like.

I’ll discuss the assumptions that are built into the model as I go along. I’ll begin at the upper left and move toward the lower right in the discussion.

The first thing to note is that sales from Google’s (formerly known as Android Marketplace) Play are not registered as revenues. This is because Google, like Apple, treats itself as an agent. Agency means that the revenues don’t “belong” to the agent but get passed on through to the primary beneficiaries. In the case of Play, Google passes 70% to developers (or content owners) and then distributes on average 25% to network operators (or carriers).

I emphasize on average because there are many cases where Play transactions are not handled by or don’t pass through operator billing systems. In those cases where operators are involved, it’s possible that they capture more than 25%. It’s not uncommon for operator billing to capture 45% of a transaction’s value. The reason for this is that there is significant collection risk on billing–far more risk than on credit cards. It would also imply that on some transactions Google may be paying out more than it receives.

This means that on average about 5% of Play content sales to be booked as revenues for Android.

This 5% ends up a quite a small amount if overall app sales are small. We don’t know the exact amount but anecdotal evidence from developers seems to indicate that they receive far more revenues from ad sales than from direct app income. Hence the size of the Android app sales is overall, modest. My estimate is that in 2011 there were about $330 million in gross app sales through the Android market. (Google estimated its sales to be 76 million for 2010 half way through that year.)

The bulk of revenues are therefore from other sources: Search, AdSense and AdMob. I’m modeling that overall revenues are based on a “revenue per device in use” multiplied by the number of devices in use. Google has publicly stated that they are targeting $10/device/yr. in revenues. This is probably ambitious as the amount was nearly that much in early 2010 but the number of devices bought by emerging market consumers exploded. As they are not actively targeted by Google’s primary customers (especially in China), the average revenue per phone is likely to be much lower. I estimated $6.5 on average for 2011.

However, even if we use $6.5 per phone per year, the total revenues are quite strong since there were likely more than 215 million users at year end[2]. That results in a total revenue base of $1.4 billion for 2011. Removing the app revenues results in about $1.38 billion from Search and AdSense and AdMob.

How to allocate revenues to these three businesses is mostly guesswork. I used a split of about one third to AdMob, 10% to AdSense and the rest to Search. If we assume this split then the next step is to consider how to allocate costs to these sources of revenue.

As discussed in the introduction to this series, the primary costs of sales for Search and AdSense are network operators and OEMs or phone vendors. They are the primary “channel” which ensure the flow of search terms to Google. As Google also explains, the channel receives revenue share–so-called traffic acquisition costs (TAC).

I used an overall allocation of 39% for TAC. Crucially, this includes the payments to developers for AdMob traffic. The rule of thumb I used was:

·                     Network operators get 20% of Search

·                     Developers get 50% of AdMob

·                     OEMs get the rest (of the TAC)

The resulting split is shown in the column above with the “Cost of Sales” at the bottom. There are also additional operations costs which are negligible.

After this 39% TAC (revenue sharing), Google needs to pay its operating expenses. This includes R&D, Marketing, Sales and Legal costs for the Android division (including AdMob). You can see the approximate values in the column labeled “Operating Expenses”. This operating cost amounts to about 27% of sales, with R&D at 14% and Marketing at 9%. These rather high fixed costs make sense as there is a significant development work underway for Android.

Finally, after these costs are allocated, the remainder is the contribution of the division. This comes to about 34% of revenues which is called the operating margin. Google has to attach depreciation from data centers and other costs as well as taxes before placing this into earnings.

Considering the agency structure, the overall cost structure of Android looks like this:

When playing with the assumptions, it becomes clear that the model is most sensitive to the revenue per device and total devices in use. The profitability is entirely dependent on those figures as variable costs are a percent of sales and fixed costs are limited by talent constraints.

For example, if revenues per device drop to $4.5/yr then the operating margin drops to 38%.

Now we can calculate some of the more interesting figures. For example:

·                     Android OEMs receive $0.76 on average per device per year

·                     Android Operators receive $1.07 on average per device per year (including Play)

·                     Android Developers, as a group, receive $1.94 per device per year (including Play and AdMob)

·                     Google receives a contribution of $2.75 per device per year from Android

Again, these figures are very sensitive to the revenue per device (currently assumed to be $6.5).

Because of the number of devices involved, these cash flows are an important part of the value network of mobile computing. The next step will be to assess how they affect the incentives, alignments and competitive stance of various platforms vying for a seat at the table of the future of information.

–

Notes:

1.             An income statement shows the sources of revenues and the costs associated with those revenues. It also shows the fixed costs (or costs which are independent of revenues so they don’t go up or down if revenues change). Finally it shows the operating income which is called contribution if it’s a division within a company. This contribution is still subject to taxes and depreciation before it’s recorded as earnings.

2.             I’m using Android installed base estimated based on daily activation rates as published by Google. I’ve discussed these estimates here. I’m using year-end estimates but subtracting retirements based on a two year device life.

Smartphones in India: Web Browsing is for Men, Texts are For Women

Interesting though not surprising. Chat on ladies !

Nielsen Informate

May 9, 2012

Nielsen Informate  Mobile Insights notes that in India, women spend the same amount of time on their smartphones as compared to men. However, there are sharp contrasts in how they use their phones.

·         Men spend 50 percent more time browsing the web on their smartphones than women.

·         Women spend 3 hours more on calls every month as compared to men.

·         Women spend 4 times the amount of time men spend on Instant Messaging (Chat) applications.

·         Men experiment more with apps – they install, on an average, 16 applications in a month compared to just 11 by women.

Calls & Messaging

Women spend nearly 20 hours a month on calls and messaging which is almost 33 percent more than time spent by men on the same activity. Also, incoming and outgoing calls both last longer among women.

Web Browsing

Men spend 50 percent more time browsing on their smartphones than women. The average number of websites visited by men is 20 in a month compared to just 14 among women. However, women prefer social sites more than men as 43 percent of web pages visited by women are social networking sites, compared to just 32 percent for men.

Online Applications

Women use online apps substantially higher compared to men, driven mainly by chat apps such as WhatsApp Messenger (which women use three times as much as men), Google Talk and Nimbuzz. Men however, don’t mind asking for directions on their smartphones, accessing the Google Maps app more than women (45% vs 32%). Men also install more apps than women – 16 applications in a month compared to just 11 by women. For both men and women around 20 percent of all apps installed are online apps.

About Nielsen Informate 


Nielsen Informate  Mobile Insights leverages innovative smartphone metering technology to provide intelligence into evolving consumption patterns of mobile device users. Based on accurate, real-time usage data, we help clients understand consumer behavior and develop product and marketing strategies. Nielsen Informate maintains opt-in smartphone panels to generate syndicated reports, in addition to building custom panels and conducting custom surveys for clients. Our insights aid decision makers across various segments like operators, OEMs, publishers, advertisers, content creators and aggregators and application developers.

Windows Phone Marketplace passes 90,000 apps

Link to article

Steady gaining traction !

Rafe Blandford, AllAboutWindowsPhone

May 15th 2012

More than 90,000 apps have now been published in the Windows Phone Marketplace and new content is currently being added at the rate of 250 apps per day. At the time of writing, 92,383 apps have been published. Of these, 24,371 were added in the last three months and 7,409 were added in the last month. These apps come from just over 22,000 different publishers.

Milestones

The 50,000 app mark was reached on December 27th, the 60,000 mark on January 22nd, the 70,000 mark on February 23rd, and the 80,000 milestone on March 26th. It has taken an additional 35 days to reach the 90,000 mark. 

At the current (April) pace, the 100,000 milestone will be reached in June, a little later than previously predicted, due to the lower than anticipated number of apps published in April (a trend that is continuing in our early May data). Microsoft recently noted that some developers had reported slowdowns in the app approval and publishing process, which may be creating a bottleneck in app submissions. We also anticipate some slow down as developers work on making existing apps compatible with the reduced (RAM) Windows Phone 7.5 devices (e.g. Nokia Lumia 610) and as project workflow and timing begins to be impacted by availability of information about the next version of Windows Phone.  

Number of Content Items (Apps) Published

The graph below shows the growth in the total number of apps (content items) published to the Windows Phone Marketplace over the last 18 months.

In common with other application stores, the total number of published items is not the same as the number of items available to consumers. Of the 92,383 items published to the Marketplace, just over 10,500 are no longer available (removed by Microsoft or withdrawn by the publisher).

In addition, some apps are only available in select markets. This means the number of available items to a consumer, in a given market, is lower than the number of published items. The current approximate figures are: US (77,536), UK (73,472), France (70,381), Spain (66,361), Italy (65,890), Germany (67,440), Australia (67,435), Russia (51,209), Brazil (44,676) India (67,451) and China (29,379).

Of these markets, China has enjoyed the strongest growth since our last report. This would suggest a combined effort by Microsoft and Nokia, to encourage existing developers to prepare their content for the Chinese market and to attract new developers from China, has been sucessful.

In April, an average of 340 apps were added to Windows Phone Marketplace per day. This was lower than January (375 per day) and March, but more than February (average of 250 per day) and significantly higher than the same time last year (105 per day). 

As we previously noted, the quantity of apps is best used only as a guideline metric. The quality of apps in an app store is also very important, but is more difficult to judge objectively.

In January, we started looking at how many times an app has been rated as a metric. This can be seen as an analog for quality since only applications and games seen as useful are likely to be downloaded and rated multiple times (spam apps will be ignored). In the UK Marketplace (total 73,472) just over 5,800 apps have been rated 5 or more times. This means the proportion of quality apps is holding steady at just over 8% of the Windows Marketplace.

As we noted in our previous report:

There is a perception that Windows Phone is missing big name apps (e.g. Instagram, Words with Friends, Angry Birds Space). As the Windows Phone Marketplace moves towards 100,000+ apps, we expect to see a shift away from quantity metrics to quality metrics when assessing and commenting on app stores. This is overdue, but caution must be exercised as there can be a tendency to focus on the presence or absence of individual apps, rather than the overall picture. 

In app terms, there is no doubt that Windows Phone is, currently, in a weaker position than iOS and Android. In quantitative terms, it faces a seemingly Sisyphean task to gain parity with a moving target. Nonetheless, in qualitative terms, there is a point at which, as far as consumers are concerned, there is little or no difference.

Nokia's recent announcement of a number of exclusive app partnerships at CTIA is a good example of the way in which more attention is being paid to both quality and the presence of app brand. In addition, Microsoft recently announced a number of initiatives that favoured quality over quantity for the Marketplace. Despite this, the overall quantity metric remains important, with the total number of apps available continuing to be quoted in most key Windows Phone-related press releases.   

Content by category and license

The chart below shows the proportion of content in each of the Windows Phone Marketplace's top level categories. Entertainment remains the the single biggest category (17,079 items). The next three biggest categories are tools + productivity (13,605), games (11,509) and books + reference (10,821 items). The four biggest categories (out of seventeen) make up 59% of the content. 

There have been no major changes in the proportion of content by category in the last few months with all categories adding content approximately in proportion to their respective existing sizes.

68% of items in the Windows Phone Marketplace are free, 10% are paid with a free trial and 22% are paid. The proportion of free apps has been slowly increasing (by a few percentage points) since the middle of last year. The wider availability of advertising SDKs for Windows Phone and an increasing willingness, by developers, to try ad-supported business models can explain most of this small increase.

Android economics: Part-1 - An introduction

Looks to be an interesting series of articles. Android economics and intricate and worth understanding the value they generate for the stakeholders in the long value chain.

Link to article


Horace Dediu, Asymco
May 13, 2012

Android has had unprecedented growth. Based on activation announcements, it’s possible to estimate that thus far, about 370 million Android devices have been activated. The total number of devices in use is a lower figure which depends on replacement rate and retirement rate. This total number of devices in use at year end is estimated in the following chart.

I added the blue line which represents what Google had as an internal estimate in mid-2010.[1] The difference between the two lines shows that Android’s growth is far higher than what the company expected.  If the company itself did not expect this growth, it’s unlikely anybody else did either.

Unexpected, exponential user growth is usually accompanied by a dramatic positive improvement in the finances of a company and a higher return to shareholders. The curious aspect of Android’s success is that it has not had an impact on either. The market has not “discounted” the half-billion anticipated Android users into a price for Google shares that reflects this growth. It can only imply that those users are not very valuable.

But why would there be such a disconnect between the number of users and their value?

In order to answer this question we have to come to grips with what I call “Android economics”. We need to understand how Google uses Android to make money and whether it is succeeding and if it’s not, why not.

In many ways, the Android business model is straight forward. It’s an extension of the existing Google business model: Revenue is obtained from Search, AdSense and the applications that enable these two.  In the case of Android there is also revenue from app sales (Google Play a.k.a. Android Market) and from AdMob. Of course, all these revenue sources (except for Play) are sold through other mobile channels that include alternative, competing platforms. They are present on iOS, Symbian, BlackBerry and even embedded OS phones ranged directly by carriers. For each of these alternatives, Google pays for placement of their search as the default search in the browser.

To Google, total search revenue from iOS is far higher than it is from Android. That’s because iOS users engage more with their devices and there are not yet a large multiple of installed Android users vs. iOS users.

But it would make sense that having your own platform would be more economical because there would be none of these placement fees. In this sense Android is another “channel” for distribution of Search and AdSense. But one which may be a lot cheaper.

However, it turns out that it does not work that way. Android has other costs.

In fact, Android’s distribution costs might be higher than other channels. What we have to understand is that all of Google’s channel revenues have a “cost”. The revenue from a particular distributor of search results that Google generates is offset by the cost to acquire the terms. You can think of it as Google paying for the queries through a revenue sharing agreement. Google does not get search terms directly and depends on distribution. Overall, it pays about 50% of revenues back to distributors. In the case of its own web sites the rate might be lower, perhaps 40%.

Google even has a term for it: Traffic Acquisition Costs or TAC.

This revenue sharing in exchange for search terms extends to Android. Google pays about 40% TAC to Android distributors of those searches. But since Android is owned by Google, who does Google need to pay for traffic? Who is an Android distributor? Who gets the revenue share?

Google does not make a secret of it: network carriers and device vendors (OEMs) receive revenue share. From the latest earnings conference call:

Yes. I mean, again, I’m not going to talk about specific of the TAC on mobile. But as you know, we get people using our devices both organically as well as through our distribution partnerships with carriers and OEMs. And typically, the OEMs and carriers participate in some of the economics that are on the Android marketplace or Google Play and some of them participate in the economics around Google Search just the way we would do syndication on the Web platform, which you do with many partners around the world. We have similar deals on the mobile front.

- Nikesh Arora, senior vice president and chief business officer at Google Google Management Discusses Q1 2012 Results – Earnings Call Transcript – Seeking Alpha

Arora made another point in the quote above. Not only is there revenue sharing with carriers and OEMs for Search and AdSearch but also for Google Play (app and content sales.)

Device vendors and carriers get a cut. Google’s model has always been one of giving a cut of revenue to their upstream distribution. It just might be surprising to hear that device vendors like Samsung and carriers get a piece of Search and apps.