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Finance makes Apple and Google forced friends (reuters.com)
101 points by petethomas 89 days ago | hide | past | web | favorite | 87 comments

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.

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.

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.

DuckDuckGo is not it's own search engine. It's an aggregator of other search engines (mostly Bing).

I can't believe can't even do the tiniest bit of research.

DDG isn't an aggregator, and it doesn't use Bing any more than it uses Google, Wikipedia, StackOverflow or anything else.


And yet their own documentation says that their "normal" search results come from Oath (Yahoo) and... Bing:


The other sources are only for their "instant answers" that appear at the top.

From what Ive read, DDG uses Bing's API to populate its search results.


I was just trying to point out that Apple is unlikely to buy a search engine that relies on another competitor's product.

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

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.

Would they need to make a return directly? If they could buy it and put significant resources on it, they'll have a direct competitor against Google, with the advantages of coming by default on Apple devices and of being privacy friendly. Just that might scare Google to pay them more to leave the Search space and put back Google as their default search engine.

In 2014 I thought that Google paid Apple around 1/10 of Google's search ad revenue from iPhones, but that number involved quite a bit of guessing.

They could do what they usually do, and make the service available only to purchasers of Apple hardware.

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)

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

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.

Apple says 'Privacy is a Human right' and continuously positioned/marketed itself as the champion of privacy especially over last year when FB and GOOG are in news reg. various privacy violation issues. Now, the article estimates over 10% of profits made by Apple are from Google because it sets Google as default search engine on a browser which comes default. So, Apple doesn't really believe what it says to the world based on its actions here and the way it folded in China reg. iCloud.

Surely Google gets more data from Android. But it does get much more data on iOS than Apple would have you believe. Case in point - Apple ostensibly prevents apps from uniquely identifying devices other than through ‘safe’ ad and vendor-specific ids. But just implement Google Firebase Anonymous Authentication in an app and try to get it to forget your id. you can delete the app and all other apps from same vendor, reset your ad id, set ‘limit tracking’ delete all google apps, clear google logins & passwords on your device, update the iOS, and when you reinstall it still knows who you are. Short of wiping the phone completely (which I haven’t tried bc of the hassle) Google appears to not only uniquely identify your device in a pretty sticky way, but to sell & give away this capability to anybody who wants it.

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.

"the search app"

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

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.

> 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.

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.

> 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...


Just as there is a Google search app on Android (https://play.google.com/store/apps/details?id=com.google.and...) there is a Google search app on iOS. They collect the same information when you perform the same actions, though many irrationally believe otherwise.

Similarly, the Google search web app collects exactly the same information on both platforms.

Is it incorrect to believe that there’s more telemetry sent to Google on an Android device vs an iPhone? IIRC, Google specific cookies in Chrome desktop can’t necessarily be turned off by typical methods so can we infer that a device running Android has more monitoring a la that vein than an iPhone?

Yes, it is incorrect. Using Chrome on Android also sends the exact same information as Chrome on iOS.

The default browser for iOS is Safari whose default search engine is Google. Does the comparison hold true still?

Up to the user. On Android, the user does not even need to sign in to an account to use the device. On iOS, you must sign into an Apple ID (which, unlike a Google or Facebook account, can never be deleted). Until very recently, you had to provide a credit card to download any apps at all onto your iPhone. This was never the case on Google Play Android devices.

Does it really work that way? Does Apple let Google use tracking cookies, browser fingerprinting, account information and/or some unique user identifiers for these searches? Are these requests even made from the phone directly or are they piped through Apple's servers? (I'm not talking about Safari but things like Siri and Spotlight.)

Google search seems to be deteorating but it is still the best one out there. I tried to switch to DDG and found myself using the !g trick to get google result way too often.

I started using it a few months ago and I find it's good enough probably 90% of the time. It's often enough that it's not really a pain.

In my experience, for anything technical (code problems, datasheets, component info or news) Google gets me the info I want much faster than DDG. I still have DDG as my default, but very often search again by Google.

For me it's perfect: you get a three-character penalty to remind you that you're sacrificing your privacy for convenience. Up-front cost. I do the same with social apps on my phone, I put them far off right on the dashboard, in a folder. That way, it's a little bit annoying. Just a little.

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.

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

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.

Not really. The direct costs to Apple for this revenue is probably inconsequential.

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.

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.

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.

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.

The user in the end chooses to use google however.

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

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.

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...

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.

Well, Apple has been getting competitive as late in Maps, and GM/Cruise is competitive on self-driving vehicles.

The big issue is Google's monopoly on english-language search, which together with Youtube gives it massive amounts of data on every person in the world, as well as giving it immense influence over public thought. I can see Youtube's monopoly ending (certainly, Instagram could have done it had Zuck not killed Instagram's attempts at long-form videos), but the gap between Google search and other competitors (only realistic ones are Bing and DDG) is immense, and probably insurmountable.

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

Apple has a higher market cap than Alphabet, Inc.

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.

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.

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.

They may be the "best" (for now) but that don't contradict the fact that I want to be able to have the choice of my default search engine when I start a new device.

Many people may not event know they can change that setting if it is not proposed the first time.

The challenge there is that new device setup is already burdened with more essential tasks.

It's gotten much better with the recent ability for one iOS device to prime the pump for a new one, but I have a hard time picturing Apple treating this setting as vital to the device setup.

I'm sure the $9 billion helps

Choosing to not change a setting is still a choice.

Not if you're ignorant of the choice.

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.

> Like were unable to create a stable democratic state.

I believe equality is an unstable equilibrium.

Throw a bunch of people on an island where everyone starts out equal. Soon, some will have marginally more power than others. Maybe they happen to be stronger, or washed ashore at a point with a few more coconuts and fish, maybe they just get lucky.

What do you use that extra power for? The obvious answer is to use it to force others to give you more power. Let that cycle run for a long time and you get the wildly unequal despotic power structures witnessed through almost all of human history.

The reason democracy "wins" is because bringing the least-powerful people up is a net benefit to everyone, including the most powerful, even if it requires bringing some of the most powerful down. It's a more efficient system -- extracts the most value from the most people -- so the total volume under the equality curve goes up at the expense of the top end going down a little.

For that to work, though, everyone has to buy into the system, even the most powerful. You need a populace that will willingly sacrifice personal power for the betterment of the whole. That requires intense, constant cultural education and community building.

When that breaks down, it's incredibly easy for a society to fall back to the default state of "everyone in it for themselves".

The horrors of WWII were enough to scare people shitless about unchecked power concentrated in the hands of a few. But those horrors are passing out of living memory right now, so it's little surprise that we're going back to authoritarianism and rapacious power hunger.

I'm generally an optimist about the human condition, but the news scares the shit out of me right now. It feels like we're forgetting everything about democracy and won't relearn it until we plunge headlong into WWIII.

I can almost hear a Scottish accent in that argument.

IDk if a thought experiment about a desert island conducted inside a mind that is already thinking in terms of economic dynamics is... There are plenty of examples in the real world. It's pretty rare that little societies have dynamics like that.

Small groups of people usually share instead of trading. Power structures usually emerge from violence, religion or someone becoming chief. Power built by the sweat of one's (scottish) brow is something more characteristic of modern, monetary, large scale industrial and post-industrial societies.

Pharaoh wasn't pharaoh because his ancestors were marginally better farmers.

I think that you are misinterpreting what he is saying.

He is not saying that Pharaons were marginally better farmers but that balance in power is intrinsically unstable.

Losing a simple pawn in the beginning of the game makes you lost the game.

And seems to center around the same ideologies that were most prevalent in the early 1900's too. Industrial/corporate capitalism and communism respectively (new names, same ideas). In the end many didn't learn and the same mistakes will repeat. Pragmatism places things somewhere in the middle, but this time around people are far less willing to make concessions or even have conversations for the sake of progress.

At least in the West, I'd say democracy has generally been fairly stable... but the forces opposed to it have strengthened or weakened over time.

Anything which deconcentrates or destroys capital (rapid innovation, war) relatively strengthens democracy.

An age of peace, and lack of political will to prevent innovation-capture by current monopolies, results in democracy weakening relative to commercial interests.

>At least in the West, I'd say democracy has generally been fairly stable

Preface: I'm happy to be corrected, since i'm not very well-versed in this topic.

In the US, is it even a democracy when a new party can't come up and win an election? You can legally lobby for a party which in reality is just a fancy word for a bribe, so how do you expect either of these parties to have a common's person best interest in mind when it comes to making policies?

Compare this to India, where a person went on a strike, and then a group of people formed a party with the said person and he ended up becoming the Chief Minister of Delhi. Now, did he turn out to be good or not is another debate, but my point is, people were fed up with established parties, and it was actually possible for a new person to form a party and make a government out of it. Majority of the population wanted a change, and it was possible for them to get it.

The question is: Why can't a new party come up? Is it due to the system itself or the "will of the people"?

The other question is: How democratic are those parties? - he primaries seem as such ...

It's due to the first past the post system strongly favouring two or few parties per constituency (otherwise if you have two parties that are closer to each other politically, then they're at a disadvantage against the third one.

> The question is: Why can't a new party come up? Is it due to the system itself or the "will of the people"?

I honestly and genuinely don't think that's much of a question.

I encourage you to read Lawrence Lessig's "Republic, Lost"[1] - which talks about how the big money behind campaign financing makes average Joe's feel as if they're choosing a politician based on their will, which turns out to not really be the case. Rather, they're choosing from a select group of politicians already rubber stamped "OK" by deep pocketed donors.

A good quote (not verbatim) from the book is basically how deep pocket donors have a sense of: "Let me choose the potential candidate options, and I don't really care who wins".

So it's the "will of the people" only so far as the people's will aligns with something they have 0 control over - the intentions/ambitions of those with money - which doesn't sound much like free will.

[1] https://www.amazon.com/Republic-Lost-Version-Lawrence-Lessig...

One more reason why we need to overturn Citizens United.

Money has always been integral to political campaigning.

But I'd say the 2016 election clearly refutes your assertion.

Republican fundraising as of 6/22/2016 in USD$millions, {total}, {candidate}, {affiliated PAC} [1]: Donald Trump (67.1, 64.6, 2.5), Jeb Bush (162.1, 35.2, 126.9), Ted Cruz (158.0, 92.6, 65.4), Marco Rubio (125.0, 47.3, 61.8)

If one wants to blame the Illuminati for secretly supporting candidates... this is a harder point in history to find support.

[1] https://www.nytimes.com/interactive/2016/us/elections/electi...

It's due to the voting system. Plurality voting systems tend towards two-party rule. This observation is known as Duverger's law [1].

Now, if the US switched to a radically different voting system today, we probably wouldn't see a flourishing of outside parties tomorrow; it could take a little while. But people sympathetic to outside parties such as the Greens or the Libertarians would be far less reluctant to vote for them if it didn't mean splitting their vote and causing the "lesser of two evils" to lose their local district.

[1] https://en.wikipedia.org/wiki/Duverger's_law

Thankfully, that's gradually changing.

This November, Maine will officially be using ranked choice voting for US House and Senate seats.

Not in the United States it's not at least. Even just the recent net neutrality pubic votes don't match what was done in the slightest. The USA is an oligarchy through and through.

There are many who don't want the government involved in 'net neutrality.' The FCC under Obama was acting in an antidemocratic manner when they claimed authority to enforce net neutrality. The executive expanding its power without the interaction of congress is far more anti-democratic than a vote that turned out a way that you didn't like.

There are many who think the net is evolving in a great way and want to limit government interference until their is a real problem. If there's a real problem then pass a law and deal with the problem. Often times these harmless laws have terrible consequences and are difficult to undo.

Are many people != Large majority. The large majority publicly backed net neutrality and then the government choice the opposite choice, which only helped a set of large, rich companies.

Yes in a democracy you will frequently deal with votes not going the way you want. Having powerful groups who can get the law changed to benefit them is a different issue and is indicative of a de facto oligarchy

I would say the large majority doesn't care about net neutrality in any meaningful way. Personally, I researched it and couldn't find any reason to a have a stance on the issue.

According to the ratio of public comments accepted by the FCC, the "many" who think the net is evolving are something like 3%

I think it was actually 0.3% when you took out duplicated comments. https://duckduckgo.com/?q=fcc+comments+99.7&t=ffsb&ia=web

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.

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..."

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.

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.

>Most people don't have enough skin in the game to be willing to accept that cost.

This reminds me somewhat of the argument over voting rights during the founding of the Constitution, ultimately being left up to the States. The argument for restriction was that those dependent on the wills of others are not independent or privileged enough to act in a way other than securing their own interests; the argument against this idea is fairly obvious.

From William Blackstone's Commentaries of the law of England is the most concise summary of the pro I'm aware of.



"I'm told I'm not even old enough to be this cynical."

Don't worry my young friend: if you think, as it seems by your comment, that there was a golden age in the past where people was better, you have a lot of way to go in your cynicism.

If you are planning to leave your burbclave, it helps to belong to a synthetic phyle, or to be a citizen of Mr. Lee’s Greater Hong Kong.

The US is deeply divided. But in the EU, you can see what government power can do. In the end, even very large companies have to follow the law.

As an EU citizen, I've thought about this for a bit and I think that maybe it is more because the large companies being targets for regulation atm (FAANG) are not EU companies.

See for example how protective the US has been of Monsanto in the past and now that Bayer has swallowed it, lots of lawsuits are suddenly underway and scandals pop up.

The EU is probably even more divided from what I can see over there in Europe. Aren't Italy, Austria, and Spain actively looking into leaving?

The book Jennifer Government by Max Barry (and of course Snow Crash by Neal Stephenson) is one of a bunch which touches upon this subject.

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