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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
by mricketson 8y ago
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.
- devtique 8y agoExcept it’s a more accurate comparison in this case since setting a default search engine is essentially pure profit, where as a hardware company Apple only makes a fraction of profit from their total revenue so it would be more accurate to compare Apple’s Googles revenue against their (pre tax) net income.
- JoshTko 8y agoNot really. The direct costs to Apple for this revenue is probably inconsequential.
- igammarays 8y agoBut the payment is pure profit because there’s no cost associated with setting Google as the default search engine.
- mricketson 8y agoGoogle 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.