I agree there's an irony here (Microsoft getting paid for each handset while Google doesn't get anything). But in the end Google still has the more lucrative position.
Because Google is still pretty well embedded into Android. So Google's still serving ads and getting all kinds of information on an ongoing basis. That's worth way more than $5 per phone
(I realize people can use other search engines with Android but it falls under the IE6 rule of "most people won't change the defaults")
So the reason Microsoft should still bother with Windows Phone 7 is that ongoing revenue stream.
The idea that Microsoft should imitate Google and go wholesale into a revenue model based on advertising sales ignores Microsoft's fundamental strength - the trust upon which its B2B relationships (the crown jewels) rely. Microsoft has a customer base which is likely to be stable over the next five to ten years - Google's customers would abandon it in a heartbeat if consumer habits change and Google's platform becomes less cost effective than a competitor's (Google has the same sort of vulnerabilities that newspapers had to Craigslist).
Because Google is still pretty well embedded into Android. So Google's still serving ads and getting all kinds of information on an ongoing basis. That's worth way more than $5 per phone
(I realize people can use other search engines with Android but it falls under the IE6 rule of "most people won't change the defaults")
So the reason Microsoft should still bother with Windows Phone 7 is that ongoing revenue stream.