EXPOSED: The Inside Scoop on Google’s Android Business

Oracle (NASDAQ:ORCL) has cornered Google (NASDAQ:GOOG) into revealing the financials behind its Android mobile OS in a patent lawsuit in which Google is the defendant. The software giant cracked open Google’s piggy bank and — much to its surprise — found it to be empty. According to the data released in court over the last week, Google has actually been losing money on Android since day one.

The jury is currently in deliberations over the first phase of the epic lawsuit between Oracle and Google. Oracle claims that Google’s Android platform infringes on copyrights and patents related to its Java programming language. Presiding U.S. District Judge William Alsup and a jury are trying to work out what kind of damages should be awarded to Oracle, if any.

Yesterday, the case took a turn for the worse from Oracle’s perspective when Judge Alsup revealed Google documents that showed the Android platform produced a net loss for every quarter of 2010, and marginal profits thereafter. Oracle was seeking $1 billion in damages, but because any damages would be calculated based on the profitability of Google’s patent violations, if Oracle wins its suit, it’s likely to receive a much smaller payout.

In the first quarter of 2010, Android generated approximately $97.7 million in revenue. In addition, the Google documents from 2010 revealed in the trial showed that Google expected a loss of $113 million in 2010, and that is expected to have earned profits of $64 million in 2011; $248 million in 2012; and $548 million in 2013. The majority of revenue is from advertising and a small percentage of revenue is attributed to app sales.

However, Oracle asserts that Android’s losses should not have any bearing on the case. Still, if Google can prove that it is not profiting from Android, then that could mean less liability. But it will be difficult for Google to explain why it is pursuing a business that is going nowhere financially.

After closing arguments Monday, the jury began their deliberations. On Thursday, Judge Alsup hinted that the jury may be deadlocked, noting that a juror sent a note asking him what happens if the panel can’t reach a unanimous decision.