4 ms·

And I suspect this is why Apple doesn't implement its own search index / service. If I were at Apple and I had payments like this coming in, I would absolutely

And I suspect this is why Apple doesn't implement its own search index / service. If I were at Apple and I had payments like this coming in, I would absolutely take $1B/year off to fund building a search engine. This because Google can 'turn off' this at any moment, so having that be a non-threat would be useful. Further there is a tremendous amount of value in crawling the web in terms of data set generation. And finally it really would allow them to build knowledge bases that would enable Siri to be more effective as a verbal assistant. But while the cash is pouring in like that? Well just ride that fountain of cash for as long as you can.

dheera 6y ago
> 'turn off' this at any moment You could always switch to Bing, which isn't really that bad as a Google replacement. In all seriousness though why would Google want to ever turn itself off for Apple devices? That would backfire horribly.
- yeetman21 6y ago
  Bing is owned by microsoft
  - dheera 6y ago
    Sure, but Microsoft would probably be more than happy to scoop up any market holes left behind by Google. Google decided to ditch China by not cooperating with the government. Bing decided to cooperate and is happily unblocked there.
- ChuckMcM 6y ago
  The way I think about it, Google's interests aren't aligned with Apple's interests. Think about the money that Apple has invested in their own bespoke ARM chips. They could have stuck with Broadcom or Samsung chips for the iPhone but they didn't. They wanted things that they couldn't get access to through a supplier, and a competitive advantage. If I were an executive at Apple I would look at the risk every supplier contributed to overall profitability and margins. And I would look to see how much value I could capture for Apple vs paying it out to third parties. So for me the question is about "How much of the user experience can I ensure will meet my standards?" and having your own search engine would help there. There are other values as well when you can make large scale semantic queries against the entire web. And it can be extremely lucrative to tie the "search experience" as a feeder into your other products (which is part of what the Justice department doesn't like about Google)
  - jeffbee 6y ago
    That logic made no sense at all. The money Apple spends developing its own CPUs is a fraction of the money they would have had to spend anyway to buy vendor CPUs. But they don't have to buy search. Search buys them! Developing their own search would convert search from a gigantic revenue stream with 100% gross margins into a massive operating expense. It's the opposite of making their own CPUs.
    - wmf 6y ago
      Presumably if Apple developed their own search engine they'd also have ads which would make similar (or higher) profit that Google makes from search ads.
      - jeffbee 6y ago
        Maybe, but it's a fair bet that they'd have the same or higher fixed costs, lower traffic, and the same or lower revenue per search. Apple hasn't really demonstrated that they can operate data infrastructure at that scale with Google's cost structure (nobody has, but especially not Apple).
    - sthnblllII 6y ago
      It makes a ton of sense. If you could have google quality search without the tracking or ads, imaging how many more iPhones Apple would sell, and how much more people would be willing to pay for them.
      - jeffbee 6y ago
        > If you could have google quality search without the tracking This is a hypothetical of the frog-with-wings variety.
        ChuckMcM 6y ago
        Using tests that are similar to what Google used internally to measure search quality in the 2006 - 2010 time frame, a side by side comparison Bing and Google have equal search quality and on contested searches like "good mortgage rate" Google's search quality is actually worse.
- treis 6y ago
  They meant the payments would be stopped not that Google would stop providing service to Apple users.
  - deleted 6y ago
    [deleted]
jamil7 6y ago
Apple does certain things well but the kind of area that a quality search engine falls in kind of feels out of their capabilities. They've struggled to get Maps to be useable and Siri is pretty bad despite being the first virtual assistant.
- unix_fan 6y ago
  It doesn’t need to. Just put it in as default on iOS.
- sthnblllII 6y ago
  Currently yes. However if they spent the whole $14 billion a year it wouldn't take long for apple to pull it off. I dont know what google spends on their search algorithm, but it cant be orders of magnitude more than $14 billion annually.
zepto 6y ago
Apple does implement its own search index and service. It just doesn’t using it to compete with Google head on currently. I’m guessing that their strategy would be to continue to integrate search results across the os gradually, rather than building a straight up Google competitor. Unless of course they are forced to.
- judge2020 6y ago
  Yep - I imagine the "siri suggested site" thing is a preview (and threat) that Apple has a search engine in its back pocket that it's ready to roll out whenever.
mythz 6y ago
> I would absolutely take $1B/year off to fund building a search engine. I'd be surprised if one of the conditions for the lucrativeness of this payment is paying Apple to not compete in Google's bread & butter, which is why I don't see there's any risk that Google would stop paying for placement whilst iOS maintains its valuable user base. If they do decide to pull the plug Apple can always acquire DDG and give themselves a head start to building a competitor.
- sidibe 6y ago
  Acquiring DDG wouldn't give them much of a head start as its value is mostly anonymizing Bing searches. Apple could just work out a deal directly with Microsoft instead.
  - mythz 6y ago
    They'd acquire DDG if they wanted a jump start into creating their own search technology. DDG does have a DuckDuckBot crawler & obviously lots of staff & expertise in the area (Apple more acqui-hires than anything else). I don't know of a more appropriate Search company they could acquire to give them a headstart given Bing isn't for sale & MSFT is non acquirable. If Google did decide to drop the payment they'd most definitely turn & collect placement checks from Bing as their first recourse, but if they wanted to build their own search technology they wouldn't be sourcing their results from Bing, they'd want to make sure they're masters of their own fate and own (or license) the technology & expertise themselves like they're doing with Apple Maps. But I don't see any of this happening, the placement payments benefits both Companies.

dheera 6y ago

> 'turn off' this at any moment You could always switch to Bing, which isn't really that bad as a Google replacement. In all seriousness though why would Google want to ever turn itself off for Apple devices? That would backfire horribly.

yeetman21 6y ago
Bing is owned by microsoft
- dheera 6y ago
  Sure, but Microsoft would probably be more than happy to scoop up any market holes left behind by Google. Google decided to ditch China by not cooperating with the government. Bing decided to cooperate and is happily unblocked there.
ChuckMcM 6y ago
The way I think about it, Google's interests aren't aligned with Apple's interests. Think about the money that Apple has invested in their own bespoke ARM chips. They could have stuck with Broadcom or Samsung chips for the iPhone but they didn't. They wanted things that they couldn't get access to through a supplier, and a competitive advantage. If I were an executive at Apple I would look at the risk every supplier contributed to overall profitability and margins. And I would look to see how much value I could capture for Apple vs paying it out to third parties. So for me the question is about "How much of the user experience can I ensure will meet my standards?" and having your own search engine would help there. There are other values as well when you can make large scale semantic queries against the entire web. And it can be extremely lucrative to tie the "search experience" as a feeder into your other products (which is part of what the Justice department doesn't like about Google)
- jeffbee 6y ago
  That logic made no sense at all. The money Apple spends developing its own CPUs is a fraction of the money they would have had to spend anyway to buy vendor CPUs. But they don't have to buy search. Search buys them! Developing their own search would convert search from a gigantic revenue stream with 100% gross margins into a massive operating expense. It's the opposite of making their own CPUs.
  - wmf 6y ago
    Presumably if Apple developed their own search engine they'd also have ads which would make similar (or higher) profit that Google makes from search ads.
    - jeffbee 6y ago
      Maybe, but it's a fair bet that they'd have the same or higher fixed costs, lower traffic, and the same or lower revenue per search. Apple hasn't really demonstrated that they can operate data infrastructure at that scale with Google's cost structure (nobody has, but especially not Apple).
  - sthnblllII 6y ago
    It makes a ton of sense. If you could have google quality search without the tracking or ads, imaging how many more iPhones Apple would sell, and how much more people would be willing to pay for them.
    - jeffbee 6y ago
      > If you could have google quality search without the tracking This is a hypothetical of the frog-with-wings variety.
      - ChuckMcM 6y ago
        Using tests that are similar to what Google used internally to measure search quality in the 2006 - 2010 time frame, a side by side comparison Bing and Google have equal search quality and on contested searches like "good mortgage rate" Google's search quality is actually worse.
treis 6y ago
They meant the payments would be stopped not that Google would stop providing service to Apple users.
- deleted 6y ago
  [deleted]

jamil7 6y ago

Apple does certain things well but the kind of area that a quality search engine falls in kind of feels out of their capabilities. They've struggled to get Maps to be useable and Siri is pretty bad despite being the first virtual assistant.

unix_fan 6y ago
It doesn’t need to. Just put it in as default on iOS.
sthnblllII 6y ago
Currently yes. However if they spent the whole $14 billion a year it wouldn't take long for apple to pull it off. I dont know what google spends on their search algorithm, but it cant be orders of magnitude more than $14 billion annually.

zepto 6y ago

Apple does implement its own search index and service. It just doesn’t using it to compete with Google head on currently. I’m guessing that their strategy would be to continue to integrate search results across the os gradually, rather than building a straight up Google competitor. Unless of course they are forced to.

judge2020 6y ago
Yep - I imagine the "siri suggested site" thing is a preview (and threat) that Apple has a search engine in its back pocket that it's ready to roll out whenever.

mythz 6y ago

> I would absolutely take $1B/year off to fund building a search engine. I'd be surprised if one of the conditions for the lucrativeness of this payment is paying Apple to not compete in Google's bread & butter, which is why I don't see there's any risk that Google would stop paying for placement whilst iOS maintains its valuable user base. If they do decide to pull the plug Apple can always acquire DDG and give themselves a head start to building a competitor.

sidibe 6y ago
Acquiring DDG wouldn't give them much of a head start as its value is mostly anonymizing Bing searches. Apple could just work out a deal directly with Microsoft instead.
- mythz 6y ago
  They'd acquire DDG if they wanted a jump start into creating their own search technology. DDG does have a DuckDuckBot crawler & obviously lots of staff & expertise in the area (Apple more acqui-hires than anything else). I don't know of a more appropriate Search company they could acquire to give them a headstart given Bing isn't for sale & MSFT is non acquirable. If Google did decide to drop the payment they'd most definitely turn & collect placement checks from Bing as their first recourse, but if they wanted to build their own search technology they wouldn't be sourcing their results from Bing, they'd want to make sure they're masters of their own fate and own (or license) the technology & expertise themselves like they're doing with Apple Maps. But I don't see any of this happening, the placement payments benefits both Companies.