Peak Google. The best Android tablet is the least Android-y. ($GOOG)

A pretty devastating piece from Bloomberg on Google's grand Android vision that mirrors my "show me the money" calls from everyone's favorite free smartphone operating system:

Since Google Inc. (GOOG) introduced its Android operating system in 2007, the company’s strategy has been simple: Give it to developers for free and make money when consumers click ads on the Web or through apps. That model is hitting a snag.

Amazon.com Inc. (AMZN) and Chinese Internet giants Baidu Inc. and Tencent Holdings Ltd. are using Android as a building block for their devices, skipping preloaded applications such as Gmail, Google Maps and YouTube that generate ad revenue for Google, as well as its app store. Amazon’s Kindle Fire tablet, which is gaining ground on Apple Inc. (AAPL)’s iPad, comes with none of those apps.

“The Fire may be the best Android tablet out there, even though it’s the least Android-y of all of them,” said Noah Elkin, an analyst at New York-based research firm EMarketer Inc. “The Google experience is very much in the background.”

The best Android tablet out there is the least "Android-y" of them all?

That's a kick in the balls.

And a validation of the tightly integrated ecosystem strategy that Apple and Amazon are leading with. No, such a strategy may not be the superior choice in, say, five years, but it sure is now.

Of course, after you kick em in the balls what comes next?

Well, apparently, you piss on them while they're down:

Many buyers may not know that the Kindle Fire, estimated to be the best-selling Android tablet ever, thanks to strong holiday sales, is even an Android tablet.

The article does make the rather astute point that even with mobile/Android/tablets, most of Google's revenues come from search advertising, not apps, for example. On the app side, Google loses little.

I'm not sure, however, that they are counting all the factors. Every single "less Android-y" Android device that sells means thousands upon thousands of datapoints that may never make their way into the Google database. Which directly impacts the overall quality of their search data and advertising response.

With Google's version of Android pushed to the background, there is now ample opportunity for Amazon, Baidu and others to cut deals with Bing, for example, or a revamped Yahoo, to provide search and display advertising. Doubtless, any product searches on such devices naturally direct us not toward Google, but to Amazon or another entity. Again, Google is cut out of the loop, entirely.

Google knows this and isn't sitting still. As much as I've given shit to Google for their false "free and open" marketing language, I did not realize how strict they were with demands for inclusion of all core Google applications:

So far, Google has pursued an all-or-nothing approach to licensing its suite of applications. In contract talks, licensees may choose to use all or most of Google’s mobile apps, or none of them. This means that to get popular apps such as Gmail and Google Maps, the licensee may also need to agree to use Google Talk, a Skype-like app for making phone calls, or Contacts, a tool for managing contact details. (emphasis mine)

Google insists on these terms to ensure that consumers aren’t prevented from using apps that have become de facto standards, and because Google’s apps are designed to work well together, Android chief Andy Rubin has said.

And for fuck's sake, does anyone at Google ever speak the truth publicly? For a company that holds all our private digital history, shouldn't we demand they be level with us -- any of the time? They require all apps because they "work well together". Jesus H. I use Gmail all the time. Youtube often, Google search some of the time. Google Earth rarely. Google Talk never. 

I am not the worse for this.

Bloomberg than reminds us why we should expect hardware vendors to seek out competing platforms, such as Windows Phone, even while they cave to Google's demands:

Many device makers have little choice other than to take a full suite of Google apps. Without Android, companies such as Samsung Electronics Co.  and HTC Corp. would have no platform for competing with Apple. With no must-have apps or services of their own, these device makers would be at a disadvantage without Google apps.

I still contend, however, that even the smart analysts who work for Bloomberg are missing the big picture. As even their own article states, *industrywide* revenue for mobile advertising is expected to grow rapidly and reach almost $21 billion in 2015.

Let's say Google takes the lion's share, say, 80%. That's approximately $17 billion. That's what Google generates *now* -- in five months.

Everyone continues to believe that mobile advertising will be supplemental! That Google's PC-based, stationary web advertising revenues will continue to grow and prosper and bring in tens of billions each year and that mobile will *add* to that.

I believe this is a fallacy.

If so, Google's 2015 revenues, I suspect, will be maybe only slightly higher than 2011.

[Hat tip to Turley Muller]