Speaking during an interview at the D: Dive Into Mobile conference, Google's VP of Engineering Andy Rubin said on Monday that the Android platform wasn't a loss-leader for Google.
Because of its open source roots, Google does not charge smartphone manufacturers to license the Android OS, however Rubin said that it's actually generating revenue due to advertising. Most of these ads are presumably found in free apps listed on the Android Market like Angry Birds, Astro File Manager and others.
"We're making money on ads generally through Android. When I was a startup there was no way I would have been profitable, my business model was completely different from what it is today," he said, referring to the days of working on the OS as Android Inc before Google acquired the company back in 2005 for an estimated $50 million.
"Now, I don't have to sell services I can just do the Google thing, which is an ad-based business model, and we are profitable," he added.
Rubin didn't toss out any specific numbers, however it's speculated that Android generates a large chunk of revenue for Google each month-- the original Angry Birds app reportedly brings home around $1 million in ad revenue per month. Analysts have predicted that the OS will generate around $5 billion in revenue by 2012.
Android has been slated as the Windows of the mobile sector, dominating a large chunk of currently available and future devices outside Apple's closed iOS realm. Android even poses as a threat to RIM thanks to the release of Motorola's DROID Pro, offering the android environment to professionals who need a high level of IT controllable security and access to a virtual private network.