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Microsoft's Newest Profit Center: Google Android

Microsoft-Ballmer-at-Windows-7-Launch

Microsoft CEO Steve Ballmer is riding Google's Android platform to success and profits.Reuters

After years of failures and bungles, Microsoft is finally making money in the handheld market -- but not in the way you’d think.

Given the vast stable of patents the company has accumulated over the years, one of Microsoft's hottest new business streams isn’t the new Windows Phone 7 -- it’s actually Google's Android platform.

There are now no fewer than five manufacturers that have agreed to pay Microsoft a few bucks for every Android device shipped, according to a report in Network World

The latest is Wistron Corp., which has signed a patent agreement “that provides broad coverage under Microsoft’s patent portfolio for Wistron’s tablets, mobile phones, e-readers and other consumer devices running the Android or Chrome platform,” Microsoft said in a press release announcing the deal.

"We are pleased that Wistron is taking advantage of our industrywide licensing program, established to help companies address Android's IP issues," Microsoft general counsel Horacio Gutierrez said in the press release.

Another reportedly extremely lucrative deal with HTC, one of the biggest Android vendors, is already completed, meaning Google’s Android is rapidly becoming Microsoft’s most industrious money-making machine.

Some analysts now believe the company makes more from Android intellectual property licensing than from the Windows Phone 7 platform -- and its new Bing search engine is still deep in the red.

Microsoft is far from finished. 

Having already signed a deal with LG, the giant is now going after Motorola and Barnes & Noble. And the Redmond-based software firm is demanding $15 for each Android handset sold by Samsung, according to Reuters -- which could be its biggest deal yet.

Analysts forecast Samsung, the world's No.2 handset maker, to have sold about 19 million smartphones in the April-June quarter, most of which run Android. It is widely expected to emerge as the No.1 smartphone maker, replacing Nokia's more than 10-year reign.

Microsoft’s beef with Linux-based products such as Android isn’t new. CEO Steve Ballmer -- who at one point called the open source operating system a “cancer” -- claimed in 2007 that the software violates 235 Microsoft patents.