[Edit Notes: Google makes a lot of money from its Youtube App. Is it getting ready to create an advertising based model on Play Store? Deepak Abbot of PayTm figures it should.]

Its a well known fact that Google is catching up with Facebook on offering mobile advertising solutions. Facebook with its native mobile App inventory has helped App publishers in achieving millions of app downloads. Google still relies on 3rd party publishers to generate its mobile inventory with much lesser control on the UI placement.

Google’s biggest owned inventory is Youtube App and without doubt they make tonnes of money with it. So why can’t they do this with Play Store? They have some great numbers going there:

Google made $1.3bn in revenues from Play Store last year. They will probably make $3bn this year. They can add another $1bn (calculations at the end on how I arrived at this figure) if they create a new property?—?AdWords for Play Store. Here is how it may look like:

And this is how the advertiser panel in Adwords would look:

Advertising is in Google’s DNA so they must already be working on it. Only reasons for not doing so may include:

Advertising is in Google’s DNA so they must already be working on it. Only reasons for not doing so may include:

User Experience Legal/Commercial issues with handset manufacturers Upcoming Google mobile search upgrade may have a better app download solution

How I arrived at $1bn revenue projection: Total yearly downloads = 35bn approx. 2% paid downloads/year =700mn x $1.5 (average CPI) = $1.05bn. Since this inventory belongs to Google, they do not share this revenue.

[About the Author: Deepak Abbot is AVP at Paytm. He has worked in companies like Reliance Entertainment- Digital, Zapak & Satyam computers handling product, marketing & analytics. Reproduced from Paytm Blog.]