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Google Secures a Vehicle Software Deal with Fiat Chrysler

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Fiat Chrysler vehicles to run Android software

Fiat Chrysler Automobiles (FCAU) has selected Google (GOOGL) to provide it with a software system for its vehicles. Google built a version of its ubiquitous Android operating system that automakers can adopt in their vehicles for infotainment capabilities.

Fiat Chrysler wants to adopt the Android software in all its vehicles by 2022, Reuters reported. Fiat Chrysler vehicles equipped with the Android software are expected to begin rolling out in the second half of 2019. The Android software for vehicles provides a platform for drivers to access music or video, receive traffic updates, and much more that enhance driving experience.

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Race for vehicle software business

Google is battling the likes of Apple and Baidu (BIDU) in the race to secure vehicle software business from automakers. In an attempt to bolster its competition in this space, Baidu teamed up last year with BlackBerry (BB) to pursue vehicle software deals together.

Opportunity for Google to extend the reach of its products

Putting its software in vehicles provides another avenue for Google to extend the reach of its products, which could, in turn, allow it to generate more revenue. For example, Google could plug in to Android’s vehicle platform to deliver targeted ads aimed at drivers, potentially allowing the company to capture more advertising dollars.

At the moment, Google derives the vast majority of its revenue from advertising. The company’s advertising revenue jumped 15.4% year-over-year to $30.7 billion in the first quarter, contributing 85% of total revenue of $36.3 billion at its parent, Alphabet. Advertising contributed 72% of revenue at Yandex (YNDX) in the first quarter.

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