
Google Could Pay Apple $1B Next Year To Remain Default Search Engine On iOS - joshmilas
http://techcrunch.com/2013/02/12/google-to-pay-apple-1-billion-next-year-to-be-default-search-engine-on-ios/
======
jrmg
This report is _full_ of hedging. Examples from the opening paragraph:

 _According to a report from Morgan Stanley, Google_ could _pay more than $1
billion in 2014 to remain the default search engine on iOS. In 2009, Google
paid only $82 million for the privilege._ Analyst Scott Devitt believes _that
it is a per-device deal growing every year._

Is there hard evidence that any of this isn't just speculation?

~~~
whaevr
Doesnt seem like it? The miss-use of "To" in the HN title and in the article
url is also hugely misleading when the actual title of the article is Google
COULD pay Apple etc,etc

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bane
Google should let it lapse, nothing would say that iOS devices are no longer
the cool thing to own then having Bing or a lousy Apple brewed search engine
be the default.

~~~
gyardley
There's not that much of a difference between Google and Bing. Most of us are
using Google for historical and cultural reasons - it's what we've used in the
past and it's just what people like us do.

~~~
X-Istence
There is enough of a difference that when I decided to test with Bing and then
Duck Duck Go (Fuck that name is complicated to type) for 2 weeks each I was
missing Google's MUCH better results for the same queries. In the Bing it on
challenge for example, Google wins 5 out of 5 for me.

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swang
This is why analysts get paid the big bucks! To randomly speculate on deals
that when confirmed make them look like they know what they are talking about
but when nothing ever materializes it doesn't matter because no one is calling
them out over it.

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bobsy
My parents are not tech savvy. However, they do know to 'Google' it. While
they may not know how to change the home page it doesn't matter what device
they are on. They go to Google to search. Even if that means finding Google
through Bing.

If they are doing this.. I wonder how much value this will actually be.

~~~
Me1000
Do your parents know how to change the default search engine on iOS?

The desktop is a different beast than mobile; I think most mobile users just
use the "search field" and find what they want.

(Edited for typo)

~~~
tych0
I think his point was that his parents don't just use the search field -- they
use google. That is, they'll search for google and then they'll search for
what they want. If google ever quits paying apple, this is the bet they'll be
making. Who knows if they're right.

~~~
bobsy
This. I remember a phone call a while ago. My mother had taken her iPad to a
hotel and "the Internet wasn't working."

I spent 5 minutes trying to get her to identify which is the url bar and which
is the search bar in Safari. In the end I gave up. My mother is smart.. i
swear.. she just somehow doesn't get this.

If she does accidentally use the search box it is to find Google which she
almost certainly doesn't realise she is already using.

Really this is my point. Parents are deeply non-tech and it is ingrained in
them to use Google whether it is the default search engine or not. I am a bit
techy and I always switch the default search engine to Google.

Google paying this money doesn't do anything for my household or my parents.
Between our two houses we have 5 iOS devices which are unaffected by this
move. It is a tiny number but it makes me wonder how many more people are like
this.

------
airlocksoftware
I know this article is speculative, but if it's true, this is why Google built
Android. I know that tech pundits like to talk about how Apple is making the
lion's share of the profits in the smartphone industry (which they are). But
despite the fact that it doesn't make them a lot of money directly, Android
has prevented Apple from gaining a stranglehold on the smartphone market. If
Apple had > 90% of the smartphone market share, they would be eating 75%+ of
Google's mobile search revenue for as long as they maintained that position.

~~~
wutbrodo
In my mind, there's never been any question that this was the purpose of
Android; aside from the goal of spreading low-cost mobile computing, the
business purpose was to avoid a market in which one company (known for their
control freak tendencies) had utter control over the mobile OS market, in a
much more locked-down manner than was the case with Windows on desktop. This
would be a disaster for Google (and arguably, the consumer), as they'd have no
market power (and the switching cost for a search engine is much lower than
the switching cost for a smartphone). The introduction of Android was simply
to ensure more competition in the market (in fact, back when Android phones
had a hardware search button, you could find many phones that mapped it to
Bing). Android was less about making money off the product directly than about
shaping the environment of the mobile industry in a manner that was less
unfavorable to Google. As another example of this strategy, see Chrome:
Performance of the dominant browsers was hindering what Google could do with
their products...until an alternative was launched and both Firefox and IE
magically decided that performance gains were possible, and now the state of
the browser market is in much better shape than it was.

It's more than a little shocking that so few people seem to understand these
concepts. You still see articles (whether from Wall St or the online tech
community) about how Android makes X dollars in revenue, as measured in AdMob
revenue from Android phones and Google Play revenue. This is then directly
compared to the estimated cost Google has put into developing it and judged to
be a failure, from a business perspective.

------
S_A_P
It sounds to me like this is a per device deal. It makes sense that the number
would grow annually. From what I saw in the article it doesn't make mention
that Apple is extorting this money out of Google either. It seems that people
see the 1 Billion dollar figure and assume something sinister is afoot. I
would not doubt that this figure was the result of negotiations between the
two companies.

------
mtgx
Apple hasn't learned much from the Maps fiasco, have they? Also, Apple seems
to be a lot more keen on _hurting_ Google than on providing the best
experience to their users. They did that with Maps, when they decided they'd
rather give the users a poorer maps experience, than continue dealing with
Google, and if Google refuses to pay this much, then they will do it with
search, too.

~~~
tseabrooks
Thats really only half the story. Apple couldn't give their customers the
experience they wanted to give them: Turn by Turn, no data mining, etc...
while staying with Google. So they made the decision to go their own way.

Hindsight being 20/20 they should've stayed with the "subpar" google maps
until their new maps were less "subpar". It's great to point out hindsight but
it's hard to fault their logic that they needed to move away from Google Maps.
The only thing to really nail them for is doing so before apple Maps were
fully baked.

(for different definitions of subpar)

~~~
ceejayoz
> Hindsight being 20/20 they should've stayed with the "subpar" google maps
> until their new maps were less "subpar".

I'd imagine widespread usage is necessary for that.

------
virtualritz
What if Google refuses to pay? Will Apple remove Google as default search
engine on iOS? Recall what happend when they replaced Google maps? Nah, I
didn't think so.

Clearly, someone at Morgan Stanley, who came up with this bollocks, must have
been wearing their pair of Joo Janta 200 Super-Chromatic Peril Sensitive
Sunglasses most of the time last year, when the maps fiasko took place.

~~~
goatforce5
Being the default search option everywhere is worth a lot to Google. A 2011
report says they pay Mozilla hundreds of millions of dollars to be the default
search option in Firefox:

[http://www.telegraph.co.uk/technology/google/8975584/Google-...](http://www.telegraph.co.uk/technology/google/8975584/Google-
triples-payment-for-Firefox-traffic.html)

So if Google doesn't pay? Bing or Yahoo will happily pay hundreds of millions
to take their place.

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jtanderson
I notice there's quite a large discrepancy between the link title on HN and
the _actual_ article title. The "to" makes it sound like the deal is done but
the article really just seems like speculation. Is this TC just desperate for
more HN clicks?

------
risratorn
To be honest wouldn't Google search disappearing from iOS devices play in
google's advantage looking at their Nexus devices? I mean ... what are the
odds Apple comes up with something beter, even third party?

~~~
hackinthebochs
I think its about time that we realize that Google is no longer the far and
above better search engine _for what most people search for_. News,
celebrities, sports, recipes, etc... these are all low hanging fruit when it
comes to search. I have no doubt that Bing is on par with Google when it comes
to these categories. I'm sure Google still wins massively on the "long tail"
search, but these types of searches are only important to a small percentage
of users. If Apple suddenly changed their default search to Bing (perhaps also
removing branding), I don't think anyone would care besides the techie folks
and the bloggers.

~~~
DominikR
I personally believe that long tail searches will become even more important
in the future with users entering their search queries via tools like Siri and
Google Now.

I do not have any hard facts to support that subjective opinion, but to me it
feels a lot more natural to speak out a query as a full sentence than to say a
few keywords.

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lemcoe9
This seems like a great deal for Google. I mean, depending on how long the $1
Billion gets them the default search spot for, I am certain they will make the
money back through ads in the near future.

~~~
markyc
the $1 Billion gets them 1 year

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sthkr
I think the $1 billion is in regards to how much advertising money that
Apple's cut earns from google's ads on iOS devices. I doubt this is just about
default inclusion of the google search engine.

