
Finance makes Apple and Google forced friends - petethomas
https://www.reuters.com/article/us-apple-google-breakingviews/breakingviews-finance-makes-apple-and-google-forced-friends-idUSKCN1MR2V9
======
lordnacho
I was expecting an article that had something to do with financial matters,
perhaps tax or borrowing rates.

This is just saying that Google finds it useful to pay Apple to be the default
search engine on their devices.

There are many, many relationships where a firm pays another firm money to do
something; we don't call that finance even though cash is a financial
instrument.

~~~
devtique
Most articles are written primarily to generate viewership, this isn’t saying
anything new, it’s just putting a spin on existing content to generate new
content and more views.

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SteveGregory
I've wondered what would happen if Apple acquired DuckDuckGo.

In theory, Apple could overpay a lot and still make a ridiculous return by
using it as their default search engine. The usage would multiply overnight.

It would also reinforce Apple's position on privacy, and make Apple less
dependent on Google for revenue.

~~~
guyzero
How would Apple make any return? Do you think DDG's ads are as profitable as
Google's?

~~~
Qwertystop
DDG's ads wouldn't need to be as profitable as Google's, they'd only need to
be as profitable as what Google pays Apple to use Google as the default search
engine, which is likely less than what Google makes on ads on searches from
Macs.

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enitihas
China also makes it easy to see there really isn't much difference between the
two corporations, accept that of convenience. Apple already operates in China
and complies to the whims of the Chinese government. Google too may start
doing that. The Apple business model allows Apple to have a stronger stance
for privacy when convenient, but they aren't willing to forgo the big buck
when it comes to the big business (China)

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rock_hard
Apple cares about privacy so much, they let Google do the dirty part of the
business and just take the checks.

~~~
endorphone
Ignoring that you can change the search engine, what Google knows about a user
using Google search on an iPhone, and a user using search on a Google Play
Android device are _extraordinarily_ different. Let's not pretend at some
false equivalency here.

~~~
lern_too_spel
No, they are exactly the same. Despite what Apple marketing would like you to
believe, the search app collects the same information when you perform the
same actions on both devices.

~~~
Doctor_Fegg
"the search app"

Genuinely - what's this on iOS? I don't recall ever having used a "search app"
on my iPhone.

~~~
endorphone
A lot of things are getting conflated in this discussion. We are discussing
the default search if you type a non-URL in the address bar of Safari. This is
what Google is paying for, and while it ends up on a website with the limited
ability to track that a website has, the sphere of data that Google has is
just a tiny pittance compared to on a Play Store device (where they know
essentially _everything_ ).

People are bringing up the Google Search app, Chrome for iOS, etc. Irrelevant.

~~~
lern_too_spel
> the sphere of data that Google has is just a tiny pittance compared to on a
> Play Store device (where they know essentially everything)

They know fewer things than Apple knows for people who never opt in to any of
the opt in settings and leave opt out settings alone. On a Play Store device,
AGPS data collection is opt in. On iOS, it is not even opt out — you can't
even disable it.

Play Store devices look even better when you consider what can be opted out of
by setting default apps and by installing system wide ad blockers.

~~~
endorphone
Another conflation. I was specifically talking about what _Google_ knows. By
using an iOS device, even if I use Google Search their universe of knowledge
about me collapses.

Even if I accept the notion that Apple collects more data than Google (which
is dubious), Google's intentions with that data are far more insidious. I
simply trust Apple a lot more as well.

~~~
lern_too_spel
> Even if I accept the notion that Apple collects more data than Google (which
> is dubious)

I showed you exactly how they collect more data. Not believing the evidence is
just an example of how marketing can result in brainwashing.

You trust Apple more for the same reason, even though they have repeatedly
lied to you. Remember this? "Unlike our competitors, Apple cannot bypass your
passcode and therefore cannot access this data. So it's not technically
feasible for us to respond to government warrants for the extraction of this
data from devices in their possession running iOS 8." [1] That no longer
appears on the linked Apple "privacy" page, which turned out to be nothing
more than a marketing page that made claims shown to be false by the FBI. A
real privacy page would have announced the changes explaining that user's data
isn't as private as originally claimed with just as much fanfare instead of
updating without notice.

[1] [https://gizmodo.com/apple-wont-turn-over-your-phones-data-
to...](https://gizmodo.com/apple-wont-turn-over-your-phones-data-to-police-if-
your-1636197341)

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mricketson
Isn’t this kind of a hyperbolic comparison? This is revenue, and should be
compared to total revenue, not profit.

By this measure, if two people pay me $1, and I have $1 in costs, then _both_
people are responsible for _100%_ of my $1 profits.

~~~
igammarays
But the payment is pure profit because there’s no cost associated with setting
Google as the default search engine.

~~~
mricketson
Google doesn’t pay Apple out of thin air for no reason – it pays because of
the popularity and market power of the platform, which only comes from
significant, sustained investment by Apple. It’s not separable from the rest
of the balance sheet. If Apple stopped investing in the platform, then Google
eventually would too.

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antirez
I wonder what would happen in a parallel universe where Google says, let's
change strategy, and provide all the Google suite apps, gmail, maps, photos,
... only to Android, at the cost of the Apple users/traffic. Maybe this would
provide a so big advantage to Android to, in the end, recover the loss and
create big issues to Apple. But my feeling is that Google pretends that the
iPhone is going to be eaten by Android soon or later anyway.

~~~
kakaorka
I think what would happen is the opposite. Apple users would just stop using
these apps and look for alternatives that exist on the App Store. Adobe tried
to do what you're suggesting with Photoshop and it failed; now they're going
to offer PS to the iPad.

------
gumby
Apple isn't dependent on Google though; Google is paying that much because
there are others willing to pay. That's all money they are paying to buy the
>85% of revenues that advertising constitutes (would be higher if they hadn't
moved Nest onto the P/L.

I have often criticized google for not producing any new products (aggregated,
the motley assortment of other revenue streams barely crack 14%) since Adwords
& Adsense almost 20 years ago, but I have to admit the purchase of Android has
really paid off: if it weren't for Android, Google would probably be paying 4x
or 5x what they are now to Apple.

------
msvan
I often hear the argument that Apple respects user privacy because their
business model is selling hardware, not user data. However, they are making
billions of dollars by letting Google sell data for them.

~~~
Aloha
The user in the end chooses to use google however.

~~~
mtgx
Default presets are not the user "choosing" something. It's why companies
always choose the opt-out method vs opt-in.

~~~
swombat
I've tried a variety of search engines and I always end up going back to
Google. They're just better overall for me.

That's been my experience and based on that I can see it being justifiable for
Apple (who is after all a very opinionated company) taking a similar stand: we
don't like defaulting to Google but they're just the best game in town so if
we want the iPhone to be the best phone out of the box it needs to default to
Google.

~~~
ummonk
Yeah that's the issue. Even if they weren't getting paid, they'd still have to
choose Google for a reasonable user experience. And I don't see that changing.
It's one thing for Apple to get into Maps, and it's another for them to get
into search...

~~~
Someguywhatever
Because google is essentially a monopoly. Almost nobody uses anything else.
Because of this monopoly and all the advertising revenue, Google effectively
has "infinite money" and uses it to metastasize into other areas such as maps,
self driving cars etc. Nobody else can do this because nobody else has
"infinite money", Google is losing money hand over fist in self driving cars,
I seriously doubt that maps comes anywhere close to breaking even. It's all
funded by the bottomless pool of advertising money.

~~~
ambicapter
> Nobody else can do this because nobody else has "infinite money"

Apple has a higher market cap than Alphabet, Inc.

~~~
Someguywhatever
That's true, but I don't think Apple has "Fuck you" money. Google definitely
has that type of cash. It has near infinite recurring revenue. They don't even
need to do anything with their current technology to maintain this, just
simply don't make any mistakes and their magical search goose will keep laying
those golden eggs.

~~~
mythz
Apple is the most valuable company in the world who makes the most profit in
the world, in the last 2017 FY they made 48B in profit compared to Google
12.6B

Apple makes so much money that they’ve given back more than 200B in buy backs
and billions more in dividends, Google has yet to return anything.

~~~
Someguywhatever
Apple is only a couple of Bad iPhone designs away from being irrelevant.
Everything you are saying is from a shareholder perspective, Apple does not
have a monopoly like Google does. So what if they have a lot of money? Wait
for a downturn and all the Apple investors who've been getting dividends DON'T
get a dividend for once, it wont be pretty. Google on the other hand doesn't
have as much money and isn't as "valuable" on paper only. The reality is far
different. Google has infinite money but not as much money in the bank right
now. Apple makes iPhone and is irrelevant outside of making iPhones. If some
other companies phone becomes the "iPhone" then Apple is dead.

------
l3robot
Disclaimer: I am not an historian nor a sociologist nor a political scientist.
It is pure intuition, so please correct me if you find me wrong.

This kind of article recalling the war declared between Apple and Google by
strong characters (reaching almost royal admiration) like Steve Jobs and
showing their alliance now forced by economical benefits, brings to my head an
observation I make for some years now.

It feels like the world is more and more returning to a, though different,
late Middle Age state where kingdoms, merchants/bankers and religion were in
control. It feels like we are close to the end of the powerful democratic
state.

Yes, these forces has always existed and played a major role in political
affairs, but during thr XXth century, we managed to keep it marginal, at least
in the West.

Now there is an inversion, Kingdoms are coming back.

There is a lot of example: formation of alliances over sole benefits of
oligarchs, growth of organisations never seen from a long time, customer
attachment to a company like it was a dogma, tax and regulation ducking by
companies, companies wars often more important than wars between states,
states bending to organisations wishes, etc.

Maybe to return to this state is a human reflex. Like were unable to create a
stable democratic state.

I don't know what to think about it atm, but I'm pretty sure we are on the
edge of a great schism with the modern era.

~~~
jimmy1
I don't know what to think either. Thinking about it at a higher level than
this:

Some days I really think people don't know how to live under a democracy.
There just always seems to be this segment of the population that want to be
told what to think (and preferably told things are going well)

Some days I think liberty is the only way to live life, but that people
mistake that liberty doesn't come at a cost. Most people don't have enough
skin in the game to be willing to accept that cost. The original pilgrims, the
founding fathers, and the lot did. There are attacks on our liberities that
would have started revolutions (Patriot act being the most egregious example).

Don't know what to think anymore. Politics disgust me. I'm told I'm not even
old enough to be this cynical.

~~~
ethbro
Politics in a democracy has always disgusted everyone.

Per Churchill, _" No one pre­tends that democ­ra­cy is per­fect or all-wise.
Indeed it has been said that democ­ra­cy is the worst form of Gov­ern­ment
except for all those oth­er forms that have been tried from time to time..."_

~~~
Someguywhatever
US is not a democracy, it's a republic AFAIK. The design philosophy behind the
architechture of US Government is explicitly that it is not a democracy.

~~~
TheCoelacanth
The US is both a democracy and a republic. The terms are not mutually
exclusive. To the contrary, it is much more common to be both than to be just
one or the other.

