As much as we like to talk about how Android is dominating the smartphone market in China, Google (NASDAQ:GOOG) (NASDAQ:GOOGL) doesn't see a penny from the more than 600 million active Android devices in the country. Google left the country in 2010 because of censorship laws, opening the door for companies such as Baidu (NASDAQ:BIDU) and Qihoo 360 (NYSE:QIHU) to launch third-party app stores.
While Google doesn't plan to reenter the country anytime soon, the company opened up the Google Play Store to Chinese app developers. This move gives developers the opportunity to reach an international audience, something many have already been working to do without the help of Google. Now, Google is looking to capitalize on these developers and help them grow their audiences.
Chinese companies looking to expand
Google couldn't have made this move at a better time. While the Chinese mobile device market is still growing strong, many of the more established players in the industry are looking to expand internationally.
Qihoo 360, for example, is starting with its mobile security software, launching an English-language version of the software last year through Google Play. As of the end of its second quarter, the company had 641 million installs of its security software, almost all of them in China. Internationally, however, it's lagging behind competitor Cheetah Mobile, which claims to have 10 million U.S. users.
Meanwhile, Chinese search giant Baidu is looking to emerging markets to expand its user base. The company is slowly expanding into North Africa, South America, and South Asia with its mobile browser and search engine. Partnering with Google, as it does for its mobile browser, gives it the opportunity to get in front of the growing audience of international users where Baidu's brand isn't as strong as it is in China.
The most profitable apps are universal
The reason this move makes sense for Google is that the most popular apps for smartphones and tablets can be applied universally. Qihoo and Baidu both make security apps and mobile browsers, which are easily translated into any language and serve a universal need. Similarly, mobile games are often simple enough that gameplay translates universally, and only a few bits of language need translation.
With a growing number of mobile devices comes a growing number of mobile developers, so there's probably a large number of small developers that would jump at any opportunity to take their products to a larger audience, especially one as universal as Google Play. That's the real market Google is going after by opening up Google Play to Chinese developers.
Large companies such as Baidu and Qihoo 360 have the resources to largely go it alone in their efforts to expand internationally. Perhaps Google will accelerate that expansion, or the Chinese Web giants may decide it suits them better to move forward independently. Small developers with low budgets, however, can't go it alone, so Google will be able to serve their needs quite well ... and make a few dollars doing it.
Taking on the world's largest mobile market
Despite the success of Android in China, Google hasn't been able to make a penny off the huge growth in China's mobile ecosystem or Internet population resulting from that success. But Google could take advantage of the growth in China by providing developers the opportunity to expand beyond the Chinese market.
Although China is the largest mobile market in the world, it's not necessarily the easiest to monetize. Expanding to North America, South America, and Europe is a big carrot for developers, and Google is uniquely positioned to bring them there and add an air of legitimacy to their apps. The result is a win-win for Chinese developers and Google.
Adam Levy has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Baidu, Google (A and C shares). Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.