Did you know that Google spent just $50 million to buy Android?

Did you know that Google spent just $50 million to buy Android?
Looking at how companies spend billions of dollars nowadays, you might think that back in 2005, when Google acquired the Android start-up, it would have spent no less than a fortune on it. After all, today’s realities show how companies like Facebook are ready to spend $19 billion for an instant messenger app like Whatsapp and over $2 billion for a Kickstarter project like the Occulus Rift. Surely, Android would have cost Google no less, you might think.

Turns out, though, it did not. We've already told you the story about how Android’s co-founder Andy Rubin started working on an operating system for digital cameras, but later on changed the project to target mobile phones, and that’s how Android was born. A year or so after the start of the project, Rubin, ran out of money, and started looking for funds at big companies like Samsung and Google.

After being laughed out of court at his first visit in Korea by Samsung top executives, he had scheduled a meeting with Google’s Larry Page. Over at Mountain View, Rubin started with a vigorous pitch, showing Page slides to illustrate how the 700-million-unit phone market is more than triple the size of the traditional computer market, and how that gap is only growing.

It did not take long to convince Page. Instead of getting funding for Android, though, Rubin was met with a surprising proposition - Google wanted to buy Android right away. The interesting part, however, is the price both parties agreed on: merely $50 million (plus incentives).

At the time, this bought Google the talented, but still very small Android team. Rubin co-founded the project with 7 other engineers, and by the summer of 2005, they were all under Google’s inviting wing. Best of all, they were not limited in their spending budget. Almost immediately after the purchase, Google shelled out over $10 million to back up the Android effort with patents. 

From there on, it’s all history, but fact is that now, Android is the world’s most popular operating system, with a commanding market share of over 80%. Not bad for a company that Google bought for $50 million, is it?

Android co-founder Andy Rubin (on the left) and Google's Larry Page

Android co-founder Andy Rubin (on the left) and Google's Larry Page


reference: Dogfight

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28 Comments

1. akki20892

Posts: 3902; Member since: Feb 04, 2013

I didn't know.

4. sgodsell

Posts: 6843; Member since: Mar 16, 2013

I wonder if Google was going to say sell it. How much do you think Google could get for Android today? So many companies use Android, like all the phone OEMS, Amazon, even Microsoft is using a form of it.

5. akki20892

Posts: 3902; Member since: Feb 04, 2013

Googolplex

20. sipha

Posts: 439; Member since: May 12, 2012

Samsung would willing pay $20 billion no doubt.

24. express77 unregistered

Whatsapp sold for 19 billion. Android is more than 100 billion probably. But it is open source and free.

27. sipha

Posts: 439; Member since: May 12, 2012

19 billion for whatsapp is just extraordinary stupidity by facebook.. You cant realy apply that methology in realy life!!

22. Finalflash

Posts: 4062; Member since: Jul 23, 2013

It is open source, they can't sell it at all. Selling it would open them up to 20 different lawsuits from 30 different trolls, the largest of which would include Apple and MS.

25. express77 unregistered

" Selling it would open them up to 20 different lawsuits from '30 different trolls'., the largest of which would include Apple and MS." LOL. +1 Dude.

14. ScottSchneider

Posts: 336; Member since: Dec 06, 2011

Oh... I thought they bought whatsapp for $19billion... Android too...!!!

18. Ashoaib

Posts: 3269; Member since: Nov 15, 2013

Thats called a throw away price

2. sip1995

Posts: 1771; Member since: Feb 07, 2014

yes...i knew it.

3. KillerKeyboard

Posts: 372; Member since: Nov 21, 2013

Lots of dyks lately.

6. shimshim

Posts: 18; Member since: Jul 04, 2012

i bought my pjs for 15 dollar. did you know?

7. QuadFace

Posts: 179; Member since: Aug 19, 2013

But the cash was to come from Samsung

8. sgodsell

Posts: 6843; Member since: Mar 16, 2013

Samsung didn't want Android. In 2005 the mobile market was dominated by feature phones running java (j2me). Smart phones were very expensive and didn't do much at that time. Blackberry and Pocket PCs were on the rise. From 2005 - 2008 it was still anyone's game. Apple surprised itself and everyone when it sold as many phones as it did in 2007. In 2008 is when everyone started to hear about Android. Google released Android and made it free for OEMs like Samsung and others. Samsung was also working on releasing its own OS at the time, Bada. Which didn't go very far.

9. arenanew

Posts: 286; Member since: Dec 30, 2013

waste and poor os i ever use if some one sell in 1 $ also . every year they pay 3 billion dollar to microsoft . made by ametured people . half baked os

28. SamDroid unregistered

Half-baked..... Do you even know what you're talking about?

10. aries.phills

Posts: 161; Member since: May 17, 2011

Having an eye for the next big thing (That's investment security). The out-right purchase of Android might end up being Larry's best business decision ever. Even uneducated folks would agree.

11. aries.phills

Posts: 161; Member since: May 17, 2011

Now, I wish I could purchase phonearena for $25M. Surely, I know it's a smart investment.

12. boosook

Posts: 1442; Member since: Nov 19, 2012

The point is that Android would never have become what it is today without google's search, services and apps. So let's not overestimate the value of the former Android company… they made the shell that google filled with its services. A good shell, indeed, but useless without the added value of gmail, gmaps and ao on.

13. PBXtech

Posts: 1032; Member since: Oct 21, 2013

Mobile competition in 2005 =/= mobile competition in 2014. The rise of the smartphones also created the rise in $ needed to purchase software for each operating system. And the more they spend, the more is expected.

19. ErenJaeger

Posts: 119; Member since: Apr 22, 2014

Also in my perspective, it's like how artists don't spend millions on their materials but how they use it can eventually earn them millions because of their creativity and effort. I'm pretty sure android was crap in the beginning but lots of effort made them valuable. Kinda not interesting news to me.

15. jroc74

Posts: 6023; Member since: Dec 30, 2010

That looks like one hell of an investment....and a cheap one today.

21. mrblah

Posts: 577; Member since: Jan 22, 2013

Look at those two gross copy cats, rich for stealing. They should get life in prison.

23. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

A much better DYK than the normal fare of, "Did you know Android phones have a power button... standard?"

26. express77 unregistered

Android is becoming closed and start showing limitations day by day. This is not good.

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