Google Set to Make $5 Billion, €3.7 Billion from Tablet Ads in 2013

Google's motives behind most of its products, even its hardware ones, have been to expand the reach of the web, or rather, the reach of its ads. With more people going online more often, Google is set to make more money.

That theory seems to be holding up at least in one respect, Google is set to make a significant chunk of money from tablet ads this year.

Mobile ads have always underperformed desktop ones, smartphone ads still do, but tablets are different it seems, the efficiency and, with that, the price of tablet ads will match desktop ones this year.

In fact, one ad consulting company, Marin Software, estimates that Google will make some $5 billion, €3.7 billion from tablet ads this year, a significant improvement over 2012.

The company estimates that the conversion rate for tablet ads, i.e. how often people tap on ads, is catching up to the PC rate, it was 3.3 percent at the end of last year, compared to 3.9 percent for desktops.

The expectation is for people to spend more and more time searching from their tablets, which will make up some 20 percent of ad clicks in the US by the end of the year.

Obviously, Google makes money whether someone uses an iPad, an Android tablet or even a Kindle Fire. But Google pays a huge amount of money to Apple to be the default search engine in iOS and is not the default in the Kindle Fire.

Meanwhile, even with the help of the Nexus 7, Android devices make up a small percentage of tablet sales in the US, but also worldwide.

Google must push the Nexus tablet line and hope to gain a bit more market share. Google Now will also play a role, the next-generation search tool is only available on official Android devices.