23 ms·

Google to pay Apple $15B to remain default Safari search engine in 2021

348 points by miles 5y ago

julienfr112 5y ago
I really don't understand what would be the threat from Apple to Google if they don't pay. Build their own search engine as they did for google maps ? Send users to Bing ? Mac users would not be thrilled ...
- arthurcolle 5y ago
  Yes, the first line item you mention is rumored to be true. Apple has been apparently working on a search engine. Given their desire to subtly influence social mores while bowing out of true progressive change (beyond LGBTQ+ lip service and pretending to adopt diversity policies), while manifesting total inability to move past their puritanical fear of adult content or basically anything outside the superficial normie sphere of influence, I doubt it will be nuanced or have enough of a "wow factor" to be any better than AltaVista circa 1998 or to scoop up any following. Lol Siri can't even perform contextually relevant suggestive searches or respond in kind back with cues after giving a static response to a query. To think they have the bargaining power to compete with Google is silly, but it shows how Google just wants to throw money at this market (iOS devices) and fears the potential for a competitor to actually release a competing product. Think different ™ * * unless the think is too different
  - 8fingerlouie 5y ago
    > Lol Siri can't even perform contextually relevant suggestive searches or respond in kind back with cues after giving a static response to a query Siri doesn't know a thing about you, that's why you get "static responses". Unlike Google, which uploads _everything_ to the cloud, most (if not all) of Apple's AI/Location/data mining stuff happens "on device", and it stays on that device. If you buy a new phone/tablet/computer, you're starting from scratch again, relearning frequent locations, charging habits, etc. The data isn't even backed up, so restoring your phone from a backup also means starting from scratch. With iOS 15, Siri is also moving "on device", so i guess it has the means to become smarter (personalized) now, when it can actually do (on device) data mining. Still not backed up though, so new phone still means you start over.
    - oblio 5y ago
      Why don't they move the data from device to device?
  - siva7 5y ago
    Google isn't the company that throws 18B at a problem if it doesn't believe that not doing so wouldn't pose a substantial business risk.
- yftsui 5y ago
  Google need Apple user’s click stream data to rank the search results?
- marvel_boy 5y ago
  Losing $15B suddenly is indeed a massive threat. Apple shares would be bearish next day.
  - siva7 5y ago
    So would Google's share if they lost overnight the exclusive status of being the primary search engine, even more so than Apple.
- Jyaif 5y ago
  Switching from one search engine to a strictly inferior one will be a hard sell to customers, but going from one search engine to a superior one privacy wise but inferior one results wise is justifiable. So they could send users to Bing, but I think it's more likely they'll send users to an Apple-branded frontend to Bing (or some other "privacy-first" frontend to an existing search engine).
- 8fingerlouie 5y ago
  Safari already comes with DuckDuckGo as a suggested search engine, and all it takes is Apple flipping a switch for users that use the default search engine, and most of that traffic would go to DDG instead of Google. Many Apple users are pragmatic, and don't care as long the search engine returns the results they want. I've been using DDG for years, and it could be DDG has gotten better, or Google has gotten worse, but where i've occasionally had to do a "!g whatever" search to get google results because DDG made no sense, i actually often get better results with DDG these days.
  - brailsafe 5y ago
    It could be that you've adapted your search style to DDG as well. I tried making the switch, and my god was it frustrating.
    - lotsofpulp 5y ago
      I doubt 90% of people even have a search style. They are just searching to get to a brand’s website they might not know the exact spelling for. Or searching for a product sold by a limited amount of retailers.
    - soraminazuki 5y ago
      I'm having the same experience as GP. I haven't changed my search style since the early 2000s, and Google search seems basically unusable for me at this point.
- bambax 5y ago
  Yes I don't understand it either. There is zero serious competition to Google, so it would be a very hard sell for Apple to switch their users to a worse search engine. The fact that Google is still unparalleled is also a mystery: why can't Bing be good? Why can't Amazon, or Apple with all their money, replicate the Google experience? This is weird.
  - londons_explore 5y ago
    Building a decent search engine requires query/clickstream data. Google has more, so Google is better. Simple.
    - mcphage 5y ago
      I don't know if I believe that. It sounds too similar to: "Building a decent search engine requires index data. Altavista has a bigger index, so Altavista is better. Simple."
      - londons_explore 5y ago
        Well that was true once. But people have higher standards for search engines now that they don't want to go through every result by hand, and therefore the main thing they're after is the ranking algorithm not the search algorithm.
        mcphage 5y ago
        Right, and maybe for the next generation of search engines it'll be something else again. Having the most query/clickstream data is what counts now, but there's no guarantee it will always count the most.
      - chrjxnandns 5y ago
        Building a good search engine requires 3 things: 1) A large index 2) Clickstream data 3) Distribution It’s a circular scaling product, as #3 increases it increases #2 which in turn improves results and leads to more #3. Google is buying distribution here which keeps their competitors from getting the valuable clickstream data that can improve their product. Thus they are reinforcing the idea that their product is the “best” while simultaneously preventing any competitor from matching them.
- ksec 5y ago
  Would most user even realise they are on a different search engine? Or would they care about it enough when majority of it are now coming from Siri Search. And if Apple partner with Bing and make an Apple's branded search engine ( like Yahoo ) while Bing pays ~$5B+ to Apple? Would user notice the results were slightly worse? And Google lose 20% of user search traffic, and these 20% user base also happens to generate 30%+ of Ads revenue. i.e They are worth a bit more than others.
256DEV 5y ago
Considering how big Apple is already ($80 billion per QUARTER!) the idea that they could at some point still decide to add a search engine and the associated revenues is amazing to me. It obviously wouldn't be a 1-to-1 switch with Google traffic coming from Apple devices but if they seriously attempted it I don't see how it wouldn't be a very substantial business very quickly. Presumably this payment is based on Google's evaluation of the search ad value attributed to Apple devices but only $3.75 billion per quarter still seems low for how much iPhone search traffic there must be? Especially considering the relatively lower level of iPhone ad blocking vs. desktop I see anecdotally in my non-tech friends. I imagine though that both companies send in fairly deadly teams of apex negotiators for a deal like this so it must be close to representing the true economic value of the tie-up...
- WanderPanda 5y ago
  I would also imagine that iPhone users are above average value for advertisers because of their spending behaviour.
- simonh 5y ago
  Monetising mobile search would also require Apple to develop a very strong advertising platform. Doing that would put them in direct conflict with themselves over privacy, either they'd have to compromise privacy to benefit their ad business, or their ad business would be significantly less attractive to advertisers. In practice this would make it very hard for them to monetise search anywhere near as well as Google can, maybe 5 to 1. So if mobile search is worth say $30bn to Google, it might be worth $6bn to Apple. Combined with the high costs of building both a search engine and an ad platform, and this would result in a massive revenue hit for Apple. I don't see how any vaguely realistic numbers lead to them benefiting from it, at least for quite a long time.
  - gordon_gee1 5y ago
    They don’t have to necessarily deeply monetize to be successful, apple could play dumb and offer ad results based on search terms only. DuckDuckGo does similar and I do wonder at scale what kind of revenue this could end up being. Google doesnt behave in an entirely pro-business way as well. Google ads are not market efficient at the moment, with competitors taking keywords that are company names for example, forcing businesses to spend to be the first option even if the user searches your business’ exact name. Eliminating just a few insulting Google search behaviors and limiting data tracking could be a nice revenue stream
programmer_dude 5y ago
If this is true, wow, the Apple walled garden is big! This answers a question I had: why do people care about the Neural hash thing so much?
infofarmer 5y ago
Ah, they joy of holding two conflicting thoughts at the same time! Like, Apple does not sell user data to third parties and Apple is sending all search traffic to Google by default for $15b a year.
- deleted 5y ago
  [deleted]
- techrat 5y ago
  How does having a default web search engine equate to "[Company] is sending *all* search traffic to [other company]"? Users have preferences and may change the engines they search with, not use Safari at all or be already using Google anyway.
  - ThePhysicist 5y ago
    95 % of users never touch predefined settings, so being the default almost always equates to being the "winner". What they should do instead is to let people select a search engine based on different criteria (including privacy friendliness). Most people would then still choose Google but the effect would be way less pronounced.
    - bko 5y ago
      Microsoft Edge would like to have a word with you. The only thing pointing people to DDG or some inferior search engine would be to frustrate non-technical people when their search results become "weird". Not all search engines are the same. I use DDG by default but I admit there is a huge difference between the two search engines and I use !g more than I'd like to admit. https://en.wikipedia.org/wiki/Usage_share_of_web_browsers https://en.wikipedia.org/wiki/Usage_share_of_web_browsers
      - KptMarchewa 5y ago
        >Microsoft Edge would like to have a word with you. The 95% statistic only works when you introduce new, hidden option. People used Chrome/Firefox/whatever before Edge, they are used to it, and it's their default.
deleted 5y ago
[deleted]
djhworld 5y ago
I doubt many people change the default search engine on their device/browser, so it must be worth it for Google. Whenever I speak to my mother she refers to the web as "Google" because it's the entrypoint to everything she does online. She doesn't type URLs, she goes to websites by typing them into the Google search box and clicking through (often the top result which is usually an ad)
- larrik 5y ago
  With the omnibox on chrome, firefox and mobile, this is pretty much everyone now, isn't it?
- insickness 5y ago
  My mother refers to the internet as "the computer." She'll say, "I found this cool new thing on the computer."
arein3 5y ago
it's not that they will instantly switch to ddg or bing or yandex and provide inferior results it's that if google doesnt pay or tries to negociate too hard apple will know that revenue stream is not guaranteed anymore and might implement their own alternative some doubdt that a competitor could overtake google, but yandex has image search/facial recognition capabilities miles ahead of what google offers
jstx1 5y ago
Seems like a lot. I wonder how Google do the analysis to decide that it's worth it or how many people use search through Safari instead of Google's app.
yawaworht1978 5y ago
If they pay 15billion, the revenue number must be astronomic, very curious to know the net revenue for this. It's valuable to Google anyway, as part of branding pr.
prvc 5y ago
The considerations that would inform such an agreement are far beyond my comprehension. I suppose we may draw the lesson from the presumptive wisdom of this decision that software defaults are very important (hobbyist developers take note!) and also that large figures ought to be nice, round numbers.
fsflover 5y ago
> After another meeting between Apple and Google senior executives, notes showed that the execs agreed: "Our vision is that we work as if we are one company." https://news.ycombinator.com/item?id=28238317 https://news.ycombinator.com/item?id=28238317
Gunax 5y ago
That is a shocking amount. Consider that google purchased YouTube for less than 2 billion. And while I know YouTube wasnt the behemoth then, I find it hard to believe that it is only worth 1 month of google being the default. And only for macintosh users! And only macintosh users who use safari! And only macintosh users who use safari who don't change the default search engine! I am curious what that amounts to per user per year.
- nikanj 5y ago
  That was in 2006. Back then a billion dollars was a lot of money, nowadays it's pre-launch valuation for a startup that has at least one MIT dropoff.
  - konschubert 5y ago
    That made me chuckle.
- manarth 5y ago
  "And only for macintosh users! And only macintosh users who use safari! And only macintosh users who use safari who don't change the default search engine!" Rather more users than that: > to ensure that it remains the default search engine on iPhone, iPad, and Mac
  - arcticbull 5y ago
    Indeed the Mac is a rounding error at Apple. > Back in January of this year, Apple confirmed there were 1.65 billion active Apple devices at the time, with iPhone alone accounting for one billion. They're only selling 5-6m Macs per quarter. [2] They sold 90m iPhones in Q4 of 2020. Extrapolating from this, roughly speaking, that would mean of the 1.65B Apple devices, 100m are Macs. [1] https://screenrant.com/android-vs-apple-active-devices-global-2021-updates/ https://screenrant.com/android-vs-apple-active-devices-globa... [2] https://www.statista.com/statistics/263444/sales-of-apple-mac-computers-since-first-quarter-2006/ https://www.statista.com/statistics/263444/sales-of-apple-ma...
- 5y ago
Barrin92 5y ago
Compare this payment to the statement of Google that "alternatives are just one click away" in the context of search engine competition. Pretty hard to square the notion that value delivered, not defaults and market power matter when you pay 15 billion for that one click
- lallysingh 5y ago
  I think you're just seeing the value of being the first click.
quanto 5y ago
Could one do a back-of-the-envelope calculation on a user acquisition cost for Google? 15b USD/year / 500 m users = 30 USD/user/year 3 searches/user/day = 1000 searches/user/year 30 USD/user/year / 1000 searches/user/year = 0.03 USD/search AFAIK, 0.03 USD per search (or impression) is in the right ballpark for advertising. ------------------------ Data used (retrieved from Google) 446m Safari users. An average user searches on Google 3 - 4 times per day.
- polote 5y ago
  You have to include the cost of preventing competitors to get bigger. If Google loose its monopoly on search Google as a whole might collapse
- tyingq 5y ago
  Might be skewed a bit by the fact that iPhone users are generally more affluent.
- ricardo81 5y ago
  I can't recall the source of how much Google makes per CPM on average, but it's significantly higher than all other search engines. If the deal is cheap/value for anyone, it's Google. It may have been in the UK CMA report on search/online advertising, IIRC it was between $30 and $50 CPM with Bing on around half that. If my arithmetic is right, 1.5bn searches would increase DDG's number of searches 15 fold. It would seem only Bing is potentially capable of putting in a bid similar to Google's.
  - nr2x 5y ago
    Until DDG starts serving results from their own index, they are essentially a privacy-branded Bing.
- arcticbull 5y ago
  My digging indicates that Apple has 1.65B active devices as of Q1 2021. The vast majority (1B) are iPhone users, and I suspect the vast majority of iOS users use Safari. Sounds like Google is getting a pretty good deal.
daniel_iversen 5y ago
I guess Apple devices are probably responsible for a decent amount of the consumer web browsing in the world (iOS has 25-30% mobile device market share). I wonder if Apple is still going to launch a full search engine[1] and that might actually change the game (Bing has less than 3% search market share and Apple might instantly get 30%!) - and they're indexing a bunch due to Siri and stuff anyway. [1] https://www.forbes.com/sites/barrycollins/2020/10/28/apple-building-search-engine-to-take-on-google-report-claims/?sh=e3a503226b20 https://www.forbes.com/sites/barrycollins/2020/10/28/apple-b...
ColinHayhurst 5y ago
This is monopolistic collusion which regulators may well try to address in various ways indicated including interoperability. Self-evidently the deal suits Google and Apple. If Microsoft outbid Google then it would simply replace one bilateral deal of collusion between 2 of the 5 GAFAMs, with another. All the other 4 search choices in Safari are Bing. Whatever they say (and some are more transparent than others) Duck, Ecosia and Yahoo are Bing. So you might argue the whole search choice menu is 3-way GAFAM collusion. The way to help users, and indeed customers who use search advertising, would be to allow easy use of multiple search engines on browsers. I want to be able to easily use all or some of crawlers Google, Bing, Mojeek, syndicates Duck, Ecosia, Startpage and others like Brave .... with one click the way I can on Firefox, or in other ways. Wouldn't you like that? No one search engine, or syndicate if you prefer to use those, can be the search or "answer" engine which will always be best. We get more value as users if we have a healthy market with multiple choices for search, and an easy way to use them all. But then I would say this; self-disclosure CEO of Mojeek - an independent no-tracking search engine.
- nova22033 5y ago
  This is no different from Fast Food restaurants carrying Pepsi(or Coke) products exclusively. If Microsoft outbid Google then it would simply replace one bilateral deal of collision between 2 of the 5 GAFAMs, with another. Yes...Just like Pepsi can offer a fast food company a better deal to carry Pepsi products exclusively
  - littlestymaar 5y ago
    This comment is a great example of whataboutism.
    - JiNCMG 5y ago
      No the comment is to show that this is standard business practice that goes back further than any of us have been alive. BTW, MCDonalds has such a s sweet deal that they will never leave. AKA they will always pay the lowest price for the Coke syrups out of any of Coke's vendors. Giving you a cup, lid and straw cost more than filling up that cup with a Coke product.
chmaynard 5y ago
Presumably this compensation by Google is pure profit for Apple. If so, that might explain why Apple hasn't developed its own search engine.
shayankh 5y ago
but what other option does Apple have anyway other than Google?
wombatmobile 5y ago
Lest we forget... August 6, 1997: In one of the most famous moments in Apple history, Steve Jobs reveals that Microsoft invested $150 million in its rival. https://www.cultofmac.com/567497/microsoft-investment-saves-apple/ https://www.cultofmac.com/567497/microsoft-investment-saves-...
- mcphage 5y ago
  I'm not sure what the relevance of this is?
  - wombatmobile 5y ago
    Yeah sorry I didn't explain it. I'm old enough to remember, but perhaps a lot of HN readers aren't. It's just that $15 billion may seem like a lot of money today to most people and even to most corporations, but for Apple and Google, it's a footnote. And yet, at one time in Steve Jobs' second tenure at Apple, just 1% of that quantum was the difference between Apple's survival and Apple's demise. Here's a better telling of the story that provides context https://www.wired.com/2009/08/dayintech-0806/ https://www.wired.com/2009/08/dayintech-0806/ and Walter Isaacson quoting how Jobs told it https://www.forbes.com/sites/ericjackson/2012/03/01/steve-jobs-used-patents-to-get-bill-gates-to-make-1997-investment-in-apple/?sh=53507be50115 https://www.forbes.com/sites/ericjackson/2012/03/01/steve-jo...
refurb 5y ago
I actually find this fascinating as it puts a dollar figure on it. It’s similar to the FDA priority voucher market. If you get a drug approved by the FDA for a neglected disease, you get a transferable voucher that gets you a priority FDA review for whatever drug you use it for. It might accelerate approval by 3-6 months. What’s that worth? Well the vouchers have sold for $100-250M lately. https://www.fiercepharma.com/pharma/sanofi-nets-valuable-fda-voucher-approval-for-first-oral-regimen-for-neglected-sleeping https://www.fiercepharma.com/pharma/sanofi-nets-valuable-fda...
- HWR_14 5y ago
  > Well the vouchers have sold for $100-250M lately. Not to dismiss what you are saying, but "I can get regulatory approval for my drug faster" seems like it got far more valuable in the past, I dunno, 20-21 months or so.
  - refurb 5y ago
    If you’re referring to Covid vaccines I’m not sure the vouchers would have made much difference. The FDA moved as fast as possible.
    - HWR_14 5y ago
      The COVID vaccines took priority over everything (rightly so). But that meant that the FDA had less time to approve anything else, so priority still became more valuable.
      - refurb 5y ago
        Ahh.. but I’m pretty sure a public health emergency would negate the voucher anyways.
        HWR_14 5y ago
        I didn't mean the voucher would let you cut in front of the vaccine. The vaccine work didn't occupy 100% of the FDA. Let's say it ate up 75%. Well, the vouchers probably worked on the other 25%. And because there is a lot less available time, the vouchers are more valuable. I mean, imagine they have space for only one non-COVID review in 2020. Can you imagine how much that would be worth?
ksec 5y ago
>Now, a new report from analysts at Bernstein suggests that the payment from Google to Apple may reach $15 billion in 2021, up from $10 billion in 2020. >Bernstein analyst Toni Sacconaghi says that Google is likely “paying to ensure Microsoft doesn’t outbid it.” The numbers just dont make any sense, both from Google's Traffic acquisition cost and Apple services revenue. And I know both number fairly well. I sometimes wonder if I could apply to be an analyst considering most, at least most of them ever came into mainstream media tends to be so wrong on tech.
- upcode 5y ago
  Could you elaborate what number would make sense?
  - ksec 5y ago
    The total payment to Apple is roughly inlined with Apple's growth on total active devices using Google. i.e Devices excluding China. [0] So every two to three years you will read how Google is paying more to Apple. Except Active Devices hasn't grown much at all. Google is effectively paying 50% premium to Apple to outbid a hypothetical Microsoft bid. CPA Cost per acquisition are already lower for Bing, and Microsoft is running with lower margin. Traffic acquisition costs for Google has been steady. And if it is a dramatic 50% increase, I am pretty sure there will be some words on it in their Quarterly Report. In the past if this was coming from those usual suspect of Apple's PR site, you can instantly tell it is Apple's propaganda machine in the work. And this isn't the first time [1] they are doing it to put pressure on both companies either. But this time it is coming from "analyst". To put $15B into perspective Google will be paying 10% of their annual revenue to Apple. There is a possibility that Apple is trying to recope a potential lost of App Store revenue which is included in the same services category as the search deal. [0] I actually believe it is closer to active user than active devices. Since a single user could have two or more Apple devices. But active devices is the only figure that Apple publish so we use that to keep things simple. [1] https://searchengineland.com/report-google-apple-safari-search-deal-expiring-yahoo-bing-want-209711 https://searchengineland.com/report-google-apple-safari-sear...
TriStateFarmer 5y ago
Who uses search engines anymore? Most new data is on Facebook/Twitter/Discord etc. Shoppers search on Amazon. Video consumers search on YouTube. My point is that is must be *super easy* to build a search engine nowadays. You only need the best 10% of websites and you have got most of the quality content. Vast majority of websites are now irrelevant remains of the old internet. Most searches could be answered by their Siri system. Therefore Apple could build a functional search engine in months, and I guess they already have one ready to go for when it is needed.
- miohtama 5y ago
  > Who uses search engines anymore? I do. It is a bas assumption to think all other, or even most of the other users, have similar usage habits as you are or are using the same services as you do, unless there are numbers to back the claims.
gigatexal 5y ago
Do we really think Apple will launch its own privacy protecting search engine if the opportunity cost is 15B and counting?
rusk 5y ago
Remember when Apple had to pay google … ios7 Apple Maps saga.
spywaregorilla 5y ago
I don't think there's a world where apple switches to bing for its default search engine. But I don't think its outlandish at all to imagine Apple rolls its own search engine and uses that as the default here. In practice I suspect this is really just google paying apple $15B not to compete with its golden goose.
- HEmanZ 5y ago
  I really think you underestimate how hard it is to "roll a search engine" the size of Google or Bing. Even a company like Apple couldn't do it in anything under maybe 7-10 years, regardless of how much money they throw at the problem.
  - holografix 5y ago
    No offence but I think you’re wrong. Apple could buy Duck Duck Go or roll their own and LOTS of people would find it good enough or do the first search on the default search engine.
    - jdavis703 5y ago
      Why would Apple buy Duck when they could just sign a deal directly with Microsoft? It’s not like Microsoft won’t know Apple bought Duck when it’s time to renew the contract anyways.
    - foo__-bar 5y ago
      Apple can't compete with Google Search by buying Duck Duck Go as it relies on Microsoft Bing's shallow index. Bing (by market share) has failed to compete with Google search. To be good enough it's about scale not necessarily fancy names
    - HEmanZ 5y ago
      I mean you can disagree with me, no problem with that. I would bet I have more knowledge about shipping major search engines than you do. I have worked extensively on both Bing and Google's search engines and now work on a third very large (O(exobytes)) search engine. 7-10 years is a really aggressive estimate IMO for something like Google or Bing, and I gave that estimate because I don't think people would believe my "realistic" estimate, even for Apple. They could buy another search engine, but again getting Duck Duck Go to scale Google scale and relevance is still honestly a massive project. I think they would risk losing people to Android phones as well. If tech-illiterate people suddenly start seeing that the "search engine" in Apple is terrible compared to Android they could lose customers. Better to just keep taking money, have a great search experience, and focus on other things.
janandonly 5y ago
DuckDuckGo is good and getting better while Google is mire bloated and irrelevant by the minute… So, Whenever I help a friend with their iDevice the first thing I do is change default searching to DDG. End game: Google stops paying Apple and Apple buys DDG.
- thejackgoode 5y ago
  I tried switching to DDG three times over last 6 years, and I always move back after I end up adding !g every second time when searching because the results are outrageously irrelevant. DDG does not understand me as Google does, bad or good thing it might be.
  - redm 5y ago
    I had the exact opposite result. I've been using DDG for about 2 years and I rarely use Google now.
  - troebr 5y ago
    Even when DDG does well, very often I'll still add in a second search with !g in case Google has an even better result. Some searches have one answer (what's the population of Paris), whereas some searches have multiple answers and you want to pick the best result(s) (how to do x).
- chimen 5y ago
  You should feed your own ego a bit more and make their devices vote for Trump on next election because you seem to know better what they need. DDG is cool and usable but to go that far and change my family's or friends default SE with something else which is inferior, unexpected and uncalled for is just..rude to say the least. A tool is a tool and people should use the best there is otherwise you're just putting them on a competitive disadvantage in life since we use a SE for almost anything these days.
- post_break 5y ago
  You're like the human version of malwarebytes. Sure I'll fix your computer, but I'm going to change your default search engine, oh you don't mind this toolbar either do ya? Bonzi Buddy over here.
xyzzy21 5y ago
And I always switch it to something else... $15B wasted as far as I matter. :-)
HumblyTossed 5y ago
Apple needs to invest heavily in DDG and make that the default. But then, they'd probably Dark Sky it.
- lallysingh 5y ago
  Isn't DDG just a bing api client?
  - YetAnotherNick 5y ago
    No.
augbot 5y ago
It would be nice to see Apple use some of that money to update Safari to be more modern. Food for thought..
qwerty456127 5y ago
What would Safari switch to if Google didn't pay?
- Synaesthesia 5y ago
  DDG or Bing and some local options for eg Russia and China
  - qwerty456127 5y ago
    You mean Apple would handle them $15B worth of value to Microsoft (or Yahoo? Isn't Bing just Yahoo reskinned with fancy wallpapers?) and Yandex for free? As for DDG, despite I myself like and use it, almost everyone whom I told said they are not satisfied with its search results. I doubt Apple is willing to harm their users satisfaction this way. I would rather expect them to go introduce a search engine of their own. The Runnaroo author has proven it is possible and not even hard even for a single developer to build their own search engine and beat Google in terms of quality and UX.
srg0 5y ago
So if it's true that there are 1B active iPhone users, then Google pays $15 per user per year.
- LeifCarrotson 5y ago
  What you really want to ask about is the ARPU metric, or Average Revenue Per User: https://mondaynote.com/the-arpus-of-the-big-four-dwarf-everybody-else-e5b02a579ed3 https://mondaynote.com/the-arpus-of-the-big-four-dwarf-every... Google gets revenues of about $256 per user per year, mostly from search ad impressions. That's the context for this $15 per user deal; their ROI is nearly 20x. For context, Apple makes about $30 on services like iCloud per user; if you factor in hardware sales every 2 years or so their revenue is $194/user/year. Facebook makes about $112 per US/Canadian user. Amazon is the big ARPU winner, making $752 per user per year based on $120/year Prime memberships plus sellers giving them their fee of approximately 15% fee + $5 shipping prices.
  - srg0 5y ago
    Yes, indeed, I was curious to see these data. Thanks for providing a link.
zahma 5y ago
And that about sums up the argument why Apple isn't really serious about privacy. Your data is always up for sale if someone bids high enough. And $15 billion is easy to part with when Google considers Apple's market share, especially for mobile phones and all the delicious location data they emit.
TheMightyLlama 5y ago
I find it interesting that the value of the ~18% of market share is $15B to google. I'm sure there's a further breakdown to ascertain the value of a single user.
- cma 5y ago
  Presumably Apple gets some value from not going with Bing, and the price may meet in the middle to an extent.
josh_today 5y ago
I had to reread and confirm that it’s $15B per year
onetimemanytime 5y ago
Shouldn't this be illegal? Google already has a huge market share yet they using profits to keep /expand market share.
AlbertCory 5y ago
People who say "they can just build their own search engine" should try Apple Maps. Yeah, it's not bad, but from my 18 months in Google Maps, I know there's a very long tail you have to get through. They have huge teams working on problems so small you wouldn't even realize they were problems. The first 90% of maps (or search) is easy. It's the 2nd and 3rd and 10th 90% that sucks up all the time.
- jacobolus 5y ago
  > People who say "they can just build their own search engine" should try Apple Maps. ... to be validated by concrete demonstration that Apple is capable of building an excellent service if they put their mind to it...
  - mhh__ 5y ago
    Excellent? It works but Google are pretty obviously the top dog here
    - wallacoloo 5y ago
      Is this true? Apple Maps came out with a feature a couple years ago where it knows which intersections are stop lights v.s. stop signs v.s. uncontrolled side streets. Rather than saying “in 1000 feet turn left”, they say “at the light, turn left”. As opposed to “go past this light, then turn left,” or “at the stop sign, turn left. Then, turn right onto <street name>.” If you glance at the screen while this is happening, the upcoming intersections helpfully have the appropriate stoplight/stopsign/etc graphic on them. They’ve found a way to communicate instructions such that you never have to worry about lane positioning, or not being ready for the next turn. Mind you, I juggle between Apple Maps and Google Maps on an iphone, so maybe Google’s features are different on Android. But this was the feature that finally got me using Apple Maps by default, and last I checked Google still hasn’t implemented anything comparable on Apple.
      - Drew_ 5y ago
        Google Maps does a similar thing with POI's like Starbucks or gas stations.
aYsY4dDQ2NrcNzA 5y ago
Does this imply that there’s another search engine company willing to pay Apple $14B? Who’s that? (Microsoft, I guess?)
morpheos137 5y ago
I don't understand how this is legal. Seems like blatantly anticompetitive behaviour. Isn't it still dumping if the price of your product is so low that it is negative?
yalogin 5y ago
I wonder how they arrive at this. Does google have any pull in this? What other options does Apple have at this point? No other search engine comes close to google and people are really used to google's UI and changing that will be very bad for the UX which Apple really cares about.
chrjxnandns 5y ago
So this is more than an entire year of revenue for Bing. How is it not anti-competitive that the dominant player spends an unattainable amount of money to keep their next biggest competitor out of the market?
spookyuser 5y ago
Can't wait to read https://twitter.com/techemails https://twitter.com/techemails in 10 years
NelsonMinar 5y ago
For comparison, Google appears to be paying Mozilla about $400M/year. https://www.zdnet.com/article/sources-mozilla-extends-its-google-search-deal/ https://www.zdnet.com/article/sources-mozilla-extends-its-go...
- INTPenis 5y ago
  Wow! You'd think with that kind of money they'd be able to fix 10 year old bugs in Firefox. What the hell is that money going towards?
  - BugsJustFindMe 5y ago
    > What the hell is that money going towards? Probably a really expensive dustpan for all the salt that people throw at them.
  - rednerrus 5y ago
    Company wide vacations.
zyemuzu 5y ago
Search is dead.
marstall 5y ago
if this was Apple's only income (somehow), what market cap would that translate to?
ChrisArchitect 5y ago
Apple is a media company that sells hardware, they don't need to spend time figuring out and maintaining search, especially if they've convinced Google to pay them that amount for the privilege.
freediver 5y ago
It looks Google is ready to pay $15/year [1] for an Apple user and $2.5/year [2] for a Firefox user. [1] $15bn/1bn apple devices [2] $500m/200m firefox installs

348 points by miles 5y ago

I really don't understand what would be the threat from Apple to Google if they don't pay. Build their own search engine as they did for google maps ? Send users to Bing ? Mac users would not be thrilled ...

arthurcolle 5y ago
Yes, the first line item you mention is rumored to be true. Apple has been apparently working on a search engine. Given their desire to subtly influence social mores while bowing out of true progressive change (beyond LGBTQ+ lip service and pretending to adopt diversity policies), while manifesting total inability to move past their puritanical fear of adult content or basically anything outside the superficial normie sphere of influence, I doubt it will be nuanced or have enough of a "wow factor" to be any better than AltaVista circa 1998 or to scoop up any following. Lol Siri can't even perform contextually relevant suggestive searches or respond in kind back with cues after giving a static response to a query. To think they have the bargaining power to compete with Google is silly, but it shows how Google just wants to throw money at this market (iOS devices) and fears the potential for a competitor to actually release a competing product. Think different ™ * * unless the think is too different
- 8fingerlouie 5y ago
  > Lol Siri can't even perform contextually relevant suggestive searches or respond in kind back with cues after giving a static response to a query Siri doesn't know a thing about you, that's why you get "static responses". Unlike Google, which uploads _everything_ to the cloud, most (if not all) of Apple's AI/Location/data mining stuff happens "on device", and it stays on that device. If you buy a new phone/tablet/computer, you're starting from scratch again, relearning frequent locations, charging habits, etc. The data isn't even backed up, so restoring your phone from a backup also means starting from scratch. With iOS 15, Siri is also moving "on device", so i guess it has the means to become smarter (personalized) now, when it can actually do (on device) data mining. Still not backed up though, so new phone still means you start over.
  - oblio 5y ago
    Why don't they move the data from device to device?
- siva7 5y ago
  Google isn't the company that throws 18B at a problem if it doesn't believe that not doing so wouldn't pose a substantial business risk.
yftsui 5y ago
Google need Apple user’s click stream data to rank the search results?
marvel_boy 5y ago
Losing $15B suddenly is indeed a massive threat. Apple shares would be bearish next day.
- siva7 5y ago
  So would Google's share if they lost overnight the exclusive status of being the primary search engine, even more so than Apple.
Jyaif 5y ago
Switching from one search engine to a strictly inferior one will be a hard sell to customers, but going from one search engine to a superior one privacy wise but inferior one results wise is justifiable. So they could send users to Bing, but I think it's more likely they'll send users to an Apple-branded frontend to Bing (or some other "privacy-first" frontend to an existing search engine).
8fingerlouie 5y ago
Safari already comes with DuckDuckGo as a suggested search engine, and all it takes is Apple flipping a switch for users that use the default search engine, and most of that traffic would go to DDG instead of Google. Many Apple users are pragmatic, and don't care as long the search engine returns the results they want. I've been using DDG for years, and it could be DDG has gotten better, or Google has gotten worse, but where i've occasionally had to do a "!g whatever" search to get google results because DDG made no sense, i actually often get better results with DDG these days.
- brailsafe 5y ago
  It could be that you've adapted your search style to DDG as well. I tried making the switch, and my god was it frustrating.
  - lotsofpulp 5y ago
    I doubt 90% of people even have a search style. They are just searching to get to a brand’s website they might not know the exact spelling for. Or searching for a product sold by a limited amount of retailers.
  - soraminazuki 5y ago
    I'm having the same experience as GP. I haven't changed my search style since the early 2000s, and Google search seems basically unusable for me at this point.
bambax 5y ago
Yes I don't understand it either. There is zero serious competition to Google, so it would be a very hard sell for Apple to switch their users to a worse search engine. The fact that Google is still unparalleled is also a mystery: why can't Bing be good? Why can't Amazon, or Apple with all their money, replicate the Google experience? This is weird.
- londons_explore 5y ago
  Building a decent search engine requires query/clickstream data. Google has more, so Google is better. Simple.
  - mcphage 5y ago
    I don't know if I believe that. It sounds too similar to: "Building a decent search engine requires index data. Altavista has a bigger index, so Altavista is better. Simple."
    - londons_explore 5y ago
      Well that was true once. But people have higher standards for search engines now that they don't want to go through every result by hand, and therefore the main thing they're after is the ranking algorithm not the search algorithm.
      - mcphage 5y ago
        Right, and maybe for the next generation of search engines it'll be something else again. Having the most query/clickstream data is what counts now, but there's no guarantee it will always count the most.
    - chrjxnandns 5y ago
      Building a good search engine requires 3 things: 1) A large index 2) Clickstream data 3) Distribution It’s a circular scaling product, as #3 increases it increases #2 which in turn improves results and leads to more #3. Google is buying distribution here which keeps their competitors from getting the valuable clickstream data that can improve their product. Thus they are reinforcing the idea that their product is the “best” while simultaneously preventing any competitor from matching them.
ksec 5y ago
Would most user even realise they are on a different search engine? Or would they care about it enough when majority of it are now coming from Siri Search. And if Apple partner with Bing and make an Apple's branded search engine ( like Yahoo ) while Bing pays ~$5B+ to Apple? Would user notice the results were slightly worse? And Google lose 20% of user search traffic, and these 20% user base also happens to generate 30%+ of Ads revenue. i.e They are worth a bit more than others.

256DEV 5y ago

Considering how big Apple is already ($80 billion per QUARTER!) the idea that they could at some point still decide to add a search engine and the associated revenues is amazing to me. It obviously wouldn't be a 1-to-1 switch with Google traffic coming from Apple devices but if they seriously attempted it I don't see how it wouldn't be a very substantial business very quickly. Presumably this payment is based on Google's evaluation of the search ad value attributed to Apple devices but only $3.75 billion per quarter still seems low for how much iPhone search traffic there must be? Especially considering the relatively lower level of iPhone ad blocking vs. desktop I see anecdotally in my non-tech friends. I imagine though that both companies send in fairly deadly teams of apex negotiators for a deal like this so it must be close to representing the true economic value of the tie-up...

WanderPanda 5y ago
I would also imagine that iPhone users are above average value for advertisers because of their spending behaviour.
simonh 5y ago
Monetising mobile search would also require Apple to develop a very strong advertising platform. Doing that would put them in direct conflict with themselves over privacy, either they'd have to compromise privacy to benefit their ad business, or their ad business would be significantly less attractive to advertisers. In practice this would make it very hard for them to monetise search anywhere near as well as Google can, maybe 5 to 1. So if mobile search is worth say $30bn to Google, it might be worth $6bn to Apple. Combined with the high costs of building both a search engine and an ad platform, and this would result in a massive revenue hit for Apple. I don't see how any vaguely realistic numbers lead to them benefiting from it, at least for quite a long time.
- gordon_gee1 5y ago
  They don’t have to necessarily deeply monetize to be successful, apple could play dumb and offer ad results based on search terms only. DuckDuckGo does similar and I do wonder at scale what kind of revenue this could end up being. Google doesnt behave in an entirely pro-business way as well. Google ads are not market efficient at the moment, with competitors taking keywords that are company names for example, forcing businesses to spend to be the first option even if the user searches your business’ exact name. Eliminating just a few insulting Google search behaviors and limiting data tracking could be a nice revenue stream

programmer_dude 5y ago

If this is true, wow, the Apple walled garden is big! This answers a question I had: why do people care about the Neural hash thing so much?

infofarmer 5y ago

Ah, they joy of holding two conflicting thoughts at the same time! Like, Apple does not sell user data to third parties and Apple is sending all search traffic to Google by default for $15b a year.

deleted 5y ago
[deleted]
techrat 5y ago
How does having a default web search engine equate to "[Company] is sending *all* search traffic to [other company]"? Users have preferences and may change the engines they search with, not use Safari at all or be already using Google anyway.
- ThePhysicist 5y ago
  95 % of users never touch predefined settings, so being the default almost always equates to being the "winner". What they should do instead is to let people select a search engine based on different criteria (including privacy friendliness). Most people would then still choose Google but the effect would be way less pronounced.
  - bko 5y ago
    Microsoft Edge would like to have a word with you. The only thing pointing people to DDG or some inferior search engine would be to frustrate non-technical people when their search results become "weird". Not all search engines are the same. I use DDG by default but I admit there is a huge difference between the two search engines and I use !g more than I'd like to admit. https://en.wikipedia.org/wiki/Usage_share_of_web_browsers https://en.wikipedia.org/wiki/Usage_share_of_web_browsers
    - KptMarchewa 5y ago
      >Microsoft Edge would like to have a word with you. The 95% statistic only works when you introduce new, hidden option. People used Chrome/Firefox/whatever before Edge, they are used to it, and it's their default.

deleted 5y ago

[deleted]

djhworld 5y ago

I doubt many people change the default search engine on their device/browser, so it must be worth it for Google. Whenever I speak to my mother she refers to the web as "Google" because it's the entrypoint to everything she does online. She doesn't type URLs, she goes to websites by typing them into the Google search box and clicking through (often the top result which is usually an ad)

larrik 5y ago
With the omnibox on chrome, firefox and mobile, this is pretty much everyone now, isn't it?
insickness 5y ago
My mother refers to the internet as "the computer." She'll say, "I found this cool new thing on the computer."

arein3 5y ago

it's not that they will instantly switch to ddg or bing or yandex and provide inferior results it's that if google doesnt pay or tries to negociate too hard apple will know that revenue stream is not guaranteed anymore and might implement their own alternative some doubdt that a competitor could overtake google, but yandex has image search/facial recognition capabilities miles ahead of what google offers

jstx1 5y ago

Seems like a lot. I wonder how Google do the analysis to decide that it's worth it or how many people use search through Safari instead of Google's app.

yawaworht1978 5y ago

If they pay 15billion, the revenue number must be astronomic, very curious to know the net revenue for this. It's valuable to Google anyway, as part of branding pr.

prvc 5y ago

The considerations that would inform such an agreement are far beyond my comprehension. I suppose we may draw the lesson from the presumptive wisdom of this decision that software defaults are very important (hobbyist developers take note!) and also that large figures ought to be nice, round numbers.

fsflover 5y ago

> After another meeting between Apple and Google senior executives, notes showed that the execs agreed: "Our vision is that we work as if we are one company." https://news.ycombinator.com/item?id=28238317 https://news.ycombinator.com/item?id=28238317

Gunax 5y ago

That is a shocking amount. Consider that google purchased YouTube for less than 2 billion. And while I know YouTube wasnt the behemoth then, I find it hard to believe that it is only worth 1 month of google being the default. And only for macintosh users! And only macintosh users who use safari! And only macintosh users who use safari who don't change the default search engine! I am curious what that amounts to per user per year.

nikanj 5y ago
That was in 2006. Back then a billion dollars was a lot of money, nowadays it's pre-launch valuation for a startup that has at least one MIT dropoff.
- konschubert 5y ago
  That made me chuckle.
manarth 5y ago
"And only for macintosh users! And only macintosh users who use safari! And only macintosh users who use safari who don't change the default search engine!" Rather more users than that: > to ensure that it remains the default search engine on iPhone, iPad, and Mac
- arcticbull 5y ago
  Indeed the Mac is a rounding error at Apple. > Back in January of this year, Apple confirmed there were 1.65 billion active Apple devices at the time, with iPhone alone accounting for one billion. They're only selling 5-6m Macs per quarter. [2] They sold 90m iPhones in Q4 of 2020. Extrapolating from this, roughly speaking, that would mean of the 1.65B Apple devices, 100m are Macs. [1] https://screenrant.com/android-vs-apple-active-devices-global-2021-updates/ https://screenrant.com/android-vs-apple-active-devices-globa... [2] https://www.statista.com/statistics/263444/sales-of-apple-mac-computers-since-first-quarter-2006/ https://www.statista.com/statistics/263444/sales-of-apple-ma...
5y ago

Barrin92 5y ago

Compare this payment to the statement of Google that "alternatives are just one click away" in the context of search engine competition. Pretty hard to square the notion that value delivered, not defaults and market power matter when you pay 15 billion for that one click

lallysingh 5y ago
I think you're just seeing the value of being the first click.

quanto 5y ago

Could one do a back-of-the-envelope calculation on a user acquisition cost for Google? 15b USD/year / 500 m users = 30 USD/user/year 3 searches/user/day = 1000 searches/user/year 30 USD/user/year / 1000 searches/user/year = 0.03 USD/search AFAIK, 0.03 USD per search (or impression) is in the right ballpark for advertising. ------------------------ Data used (retrieved from Google) 446m Safari users. An average user searches on Google 3 - 4 times per day.

polote 5y ago
You have to include the cost of preventing competitors to get bigger. If Google loose its monopoly on search Google as a whole might collapse
tyingq 5y ago
Might be skewed a bit by the fact that iPhone users are generally more affluent.
ricardo81 5y ago
I can't recall the source of how much Google makes per CPM on average, but it's significantly higher than all other search engines. If the deal is cheap/value for anyone, it's Google. It may have been in the UK CMA report on search/online advertising, IIRC it was between $30 and $50 CPM with Bing on around half that. If my arithmetic is right, 1.5bn searches would increase DDG's number of searches 15 fold. It would seem only Bing is potentially capable of putting in a bid similar to Google's.
- nr2x 5y ago
  Until DDG starts serving results from their own index, they are essentially a privacy-branded Bing.
arcticbull 5y ago
My digging indicates that Apple has 1.65B active devices as of Q1 2021. The vast majority (1B) are iPhone users, and I suspect the vast majority of iOS users use Safari. Sounds like Google is getting a pretty good deal.

daniel_iversen 5y ago

I guess Apple devices are probably responsible for a decent amount of the consumer web browsing in the world (iOS has 25-30% mobile device market share). I wonder if Apple is still going to launch a full search engine[1] and that might actually change the game (Bing has less than 3% search market share and Apple might instantly get 30%!) - and they're indexing a bunch due to Siri and stuff anyway. [1] https://www.forbes.com/sites/barrycollins/2020/10/28/apple-building-search-engine-to-take-on-google-report-claims/?sh=e3a503226b20 https://www.forbes.com/sites/barrycollins/2020/10/28/apple-b...

ColinHayhurst 5y ago

This is monopolistic collusion which regulators may well try to address in various ways indicated including interoperability. Self-evidently the deal suits Google and Apple. If Microsoft outbid Google then it would simply replace one bilateral deal of collusion between 2 of the 5 GAFAMs, with another. All the other 4 search choices in Safari are Bing. Whatever they say (and some are more transparent than others) Duck, Ecosia and Yahoo are Bing. So you might argue the whole search choice menu is 3-way GAFAM collusion. The way to help users, and indeed customers who use search advertising, would be to allow easy use of multiple search engines on browsers. I want to be able to easily use all or some of crawlers Google, Bing, Mojeek, syndicates Duck, Ecosia, Startpage and others like Brave .... with one click the way I can on Firefox, or in other ways. Wouldn't you like that? No one search engine, or syndicate if you prefer to use those, can be the search or "answer" engine which will always be best. We get more value as users if we have a healthy market with multiple choices for search, and an easy way to use them all. But then I would say this; self-disclosure CEO of Mojeek - an independent no-tracking search engine.

nova22033 5y ago
This is no different from Fast Food restaurants carrying Pepsi(or Coke) products exclusively. If Microsoft outbid Google then it would simply replace one bilateral deal of collision between 2 of the 5 GAFAMs, with another. Yes...Just like Pepsi can offer a fast food company a better deal to carry Pepsi products exclusively
- littlestymaar 5y ago
  This comment is a great example of whataboutism.
  - JiNCMG 5y ago
    No the comment is to show that this is standard business practice that goes back further than any of us have been alive. BTW, MCDonalds has such a s sweet deal that they will never leave. AKA they will always pay the lowest price for the Coke syrups out of any of Coke's vendors. Giving you a cup, lid and straw cost more than filling up that cup with a Coke product.

chmaynard 5y ago

Presumably this compensation by Google is pure profit for Apple. If so, that might explain why Apple hasn't developed its own search engine.

shayankh 5y ago

but what other option does Apple have anyway other than Google?

wombatmobile 5y ago

Lest we forget... August 6, 1997: In one of the most famous moments in Apple history, Steve Jobs reveals that Microsoft invested $150 million in its rival. https://www.cultofmac.com/567497/microsoft-investment-saves-apple/ https://www.cultofmac.com/567497/microsoft-investment-saves-...

mcphage 5y ago
I'm not sure what the relevance of this is?
- wombatmobile 5y ago
  Yeah sorry I didn't explain it. I'm old enough to remember, but perhaps a lot of HN readers aren't. It's just that $15 billion may seem like a lot of money today to most people and even to most corporations, but for Apple and Google, it's a footnote. And yet, at one time in Steve Jobs' second tenure at Apple, just 1% of that quantum was the difference between Apple's survival and Apple's demise. Here's a better telling of the story that provides context https://www.wired.com/2009/08/dayintech-0806/ https://www.wired.com/2009/08/dayintech-0806/ and Walter Isaacson quoting how Jobs told it https://www.forbes.com/sites/ericjackson/2012/03/01/steve-jobs-used-patents-to-get-bill-gates-to-make-1997-investment-in-apple/?sh=53507be50115 https://www.forbes.com/sites/ericjackson/2012/03/01/steve-jo...

refurb 5y ago

I actually find this fascinating as it puts a dollar figure on it. It’s similar to the FDA priority voucher market. If you get a drug approved by the FDA for a neglected disease, you get a transferable voucher that gets you a priority FDA review for whatever drug you use it for. It might accelerate approval by 3-6 months. What’s that worth? Well the vouchers have sold for $100-250M lately. https://www.fiercepharma.com/pharma/sanofi-nets-valuable-fda-voucher-approval-for-first-oral-regimen-for-neglected-sleeping https://www.fiercepharma.com/pharma/sanofi-nets-valuable-fda...

HWR_14 5y ago
> Well the vouchers have sold for $100-250M lately. Not to dismiss what you are saying, but "I can get regulatory approval for my drug faster" seems like it got far more valuable in the past, I dunno, 20-21 months or so.
- refurb 5y ago
  If you’re referring to Covid vaccines I’m not sure the vouchers would have made much difference. The FDA moved as fast as possible.
  - HWR_14 5y ago
    The COVID vaccines took priority over everything (rightly so). But that meant that the FDA had less time to approve anything else, so priority still became more valuable.
    - refurb 5y ago
      Ahh.. but I’m pretty sure a public health emergency would negate the voucher anyways.
      - HWR_14 5y ago
        I didn't mean the voucher would let you cut in front of the vaccine. The vaccine work didn't occupy 100% of the FDA. Let's say it ate up 75%. Well, the vouchers probably worked on the other 25%. And because there is a lot less available time, the vouchers are more valuable. I mean, imagine they have space for only one non-COVID review in 2020. Can you imagine how much that would be worth?

ksec 5y ago

>Now, a new report from analysts at Bernstein suggests that the payment from Google to Apple may reach $15 billion in 2021, up from $10 billion in 2020. >Bernstein analyst Toni Sacconaghi says that Google is likely “paying to ensure Microsoft doesn’t outbid it.” The numbers just dont make any sense, both from Google's Traffic acquisition cost and Apple services revenue. And I know both number fairly well. I sometimes wonder if I could apply to be an analyst considering most, at least most of them ever came into mainstream media tends to be so wrong on tech.

upcode 5y ago
Could you elaborate what number would make sense?
- ksec 5y ago
  The total payment to Apple is roughly inlined with Apple's growth on total active devices using Google. i.e Devices excluding China. [0] So every two to three years you will read how Google is paying more to Apple. Except Active Devices hasn't grown much at all. Google is effectively paying 50% premium to Apple to outbid a hypothetical Microsoft bid. CPA Cost per acquisition are already lower for Bing, and Microsoft is running with lower margin. Traffic acquisition costs for Google has been steady. And if it is a dramatic 50% increase, I am pretty sure there will be some words on it in their Quarterly Report. In the past if this was coming from those usual suspect of Apple's PR site, you can instantly tell it is Apple's propaganda machine in the work. And this isn't the first time [1] they are doing it to put pressure on both companies either. But this time it is coming from "analyst". To put $15B into perspective Google will be paying 10% of their annual revenue to Apple. There is a possibility that Apple is trying to recope a potential lost of App Store revenue which is included in the same services category as the search deal. [0] I actually believe it is closer to active user than active devices. Since a single user could have two or more Apple devices. But active devices is the only figure that Apple publish so we use that to keep things simple. [1] https://searchengineland.com/report-google-apple-safari-search-deal-expiring-yahoo-bing-want-209711 https://searchengineland.com/report-google-apple-safari-sear...

TriStateFarmer 5y ago

Who uses search engines anymore? Most new data is on Facebook/Twitter/Discord etc. Shoppers search on Amazon. Video consumers search on YouTube. My point is that is must be *super easy* to build a search engine nowadays. You only need the best 10% of websites and you have got most of the quality content. Vast majority of websites are now irrelevant remains of the old internet. Most searches could be answered by their Siri system. Therefore Apple could build a functional search engine in months, and I guess they already have one ready to go for when it is needed.

miohtama 5y ago
> Who uses search engines anymore? I do. It is a bas assumption to think all other, or even most of the other users, have similar usage habits as you are or are using the same services as you do, unless there are numbers to back the claims.

gigatexal 5y ago

Do we really think Apple will launch its own privacy protecting search engine if the opportunity cost is 15B and counting?

rusk 5y ago

Remember when Apple had to pay google … ios7 Apple Maps saga.

spywaregorilla 5y ago

I don't think there's a world where apple switches to bing for its default search engine. But I don't think its outlandish at all to imagine Apple rolls its own search engine and uses that as the default here. In practice I suspect this is really just google paying apple $15B not to compete with its golden goose.

HEmanZ 5y ago
I really think you underestimate how hard it is to "roll a search engine" the size of Google or Bing. Even a company like Apple couldn't do it in anything under maybe 7-10 years, regardless of how much money they throw at the problem.
- holografix 5y ago
  No offence but I think you’re wrong. Apple could buy Duck Duck Go or roll their own and LOTS of people would find it good enough or do the first search on the default search engine.
  - jdavis703 5y ago
    Why would Apple buy Duck when they could just sign a deal directly with Microsoft? It’s not like Microsoft won’t know Apple bought Duck when it’s time to renew the contract anyways.
  - foo__-bar 5y ago
    Apple can't compete with Google Search by buying Duck Duck Go as it relies on Microsoft Bing's shallow index. Bing (by market share) has failed to compete with Google search. To be good enough it's about scale not necessarily fancy names
  - HEmanZ 5y ago
    I mean you can disagree with me, no problem with that. I would bet I have more knowledge about shipping major search engines than you do. I have worked extensively on both Bing and Google's search engines and now work on a third very large (O(exobytes)) search engine. 7-10 years is a really aggressive estimate IMO for something like Google or Bing, and I gave that estimate because I don't think people would believe my "realistic" estimate, even for Apple. They could buy another search engine, but again getting Duck Duck Go to scale Google scale and relevance is still honestly a massive project. I think they would risk losing people to Android phones as well. If tech-illiterate people suddenly start seeing that the "search engine" in Apple is terrible compared to Android they could lose customers. Better to just keep taking money, have a great search experience, and focus on other things.

janandonly 5y ago

DuckDuckGo is good and getting better while Google is mire bloated and irrelevant by the minute… So, Whenever I help a friend with their iDevice the first thing I do is change default searching to DDG. End game: Google stops paying Apple and Apple buys DDG.

thejackgoode 5y ago
I tried switching to DDG three times over last 6 years, and I always move back after I end up adding !g every second time when searching because the results are outrageously irrelevant. DDG does not understand me as Google does, bad or good thing it might be.
- redm 5y ago
  I had the exact opposite result. I've been using DDG for about 2 years and I rarely use Google now.
- troebr 5y ago
  Even when DDG does well, very often I'll still add in a second search with !g in case Google has an even better result. Some searches have one answer (what's the population of Paris), whereas some searches have multiple answers and you want to pick the best result(s) (how to do x).
chimen 5y ago
You should feed your own ego a bit more and make their devices vote for Trump on next election because you seem to know better what they need. DDG is cool and usable but to go that far and change my family's or friends default SE with something else which is inferior, unexpected and uncalled for is just..rude to say the least. A tool is a tool and people should use the best there is otherwise you're just putting them on a competitive disadvantage in life since we use a SE for almost anything these days.
post_break 5y ago
You're like the human version of malwarebytes. Sure I'll fix your computer, but I'm going to change your default search engine, oh you don't mind this toolbar either do ya? Bonzi Buddy over here.

xyzzy21 5y ago

And I always switch it to something else... $15B wasted as far as I matter. :-)

HumblyTossed 5y ago

Apple needs to invest heavily in DDG and make that the default. But then, they'd probably Dark Sky it.

lallysingh 5y ago
Isn't DDG just a bing api client?
- YetAnotherNick 5y ago
  No.

augbot 5y ago

It would be nice to see Apple use some of that money to update Safari to be more modern. Food for thought..

qwerty456127 5y ago

What would Safari switch to if Google didn't pay?

Synaesthesia 5y ago
DDG or Bing and some local options for eg Russia and China
- qwerty456127 5y ago
  You mean Apple would handle them $15B worth of value to Microsoft (or Yahoo? Isn't Bing just Yahoo reskinned with fancy wallpapers?) and Yandex for free? As for DDG, despite I myself like and use it, almost everyone whom I told said they are not satisfied with its search results. I doubt Apple is willing to harm their users satisfaction this way. I would rather expect them to go introduce a search engine of their own. The Runnaroo author has proven it is possible and not even hard even for a single developer to build their own search engine and beat Google in terms of quality and UX.

srg0 5y ago

So if it's true that there are 1B active iPhone users, then Google pays $15 per user per year.

LeifCarrotson 5y ago
What you really want to ask about is the ARPU metric, or Average Revenue Per User: https://mondaynote.com/the-arpus-of-the-big-four-dwarf-everybody-else-e5b02a579ed3 https://mondaynote.com/the-arpus-of-the-big-four-dwarf-every... Google gets revenues of about $256 per user per year, mostly from search ad impressions. That's the context for this $15 per user deal; their ROI is nearly 20x. For context, Apple makes about $30 on services like iCloud per user; if you factor in hardware sales every 2 years or so their revenue is $194/user/year. Facebook makes about $112 per US/Canadian user. Amazon is the big ARPU winner, making $752 per user per year based on $120/year Prime memberships plus sellers giving them their fee of approximately 15% fee + $5 shipping prices.
- srg0 5y ago
  Yes, indeed, I was curious to see these data. Thanks for providing a link.

zahma 5y ago

And that about sums up the argument why Apple isn't really serious about privacy. Your data is always up for sale if someone bids high enough. And $15 billion is easy to part with when Google considers Apple's market share, especially for mobile phones and all the delicious location data they emit.

TheMightyLlama 5y ago

I find it interesting that the value of the ~18% of market share is $15B to google. I'm sure there's a further breakdown to ascertain the value of a single user.

cma 5y ago
Presumably Apple gets some value from not going with Bing, and the price may meet in the middle to an extent.

josh_today 5y ago

I had to reread and confirm that it’s $15B per year

onetimemanytime 5y ago

Shouldn't this be illegal? Google already has a huge market share yet they using profits to keep /expand market share.

AlbertCory 5y ago

People who say "they can just build their own search engine" should try Apple Maps. Yeah, it's not bad, but from my 18 months in Google Maps, I know there's a very long tail you have to get through. They have huge teams working on problems so small you wouldn't even realize they were problems. The first 90% of maps (or search) is easy. It's the 2nd and 3rd and 10th 90% that sucks up all the time.

jacobolus 5y ago
> People who say "they can just build their own search engine" should try Apple Maps. ... to be validated by concrete demonstration that Apple is capable of building an excellent service if they put their mind to it...
- mhh__ 5y ago
  Excellent? It works but Google are pretty obviously the top dog here
  - wallacoloo 5y ago
    Is this true? Apple Maps came out with a feature a couple years ago where it knows which intersections are stop lights v.s. stop signs v.s. uncontrolled side streets. Rather than saying “in 1000 feet turn left”, they say “at the light, turn left”. As opposed to “go past this light, then turn left,” or “at the stop sign, turn left. Then, turn right onto <street name>.” If you glance at the screen while this is happening, the upcoming intersections helpfully have the appropriate stoplight/stopsign/etc graphic on them. They’ve found a way to communicate instructions such that you never have to worry about lane positioning, or not being ready for the next turn. Mind you, I juggle between Apple Maps and Google Maps on an iphone, so maybe Google’s features are different on Android. But this was the feature that finally got me using Apple Maps by default, and last I checked Google still hasn’t implemented anything comparable on Apple.
    - Drew_ 5y ago
      Google Maps does a similar thing with POI's like Starbucks or gas stations.

aYsY4dDQ2NrcNzA 5y ago

Does this imply that there’s another search engine company willing to pay Apple $14B? Who’s that? (Microsoft, I guess?)

morpheos137 5y ago

I don't understand how this is legal. Seems like blatantly anticompetitive behaviour. Isn't it still dumping if the price of your product is so low that it is negative?

yalogin 5y ago

I wonder how they arrive at this. Does google have any pull in this? What other options does Apple have at this point? No other search engine comes close to google and people are really used to google's UI and changing that will be very bad for the UX which Apple really cares about.

chrjxnandns 5y ago

So this is more than an entire year of revenue for Bing. How is it not anti-competitive that the dominant player spends an unattainable amount of money to keep their next biggest competitor out of the market?

spookyuser 5y ago

Can't wait to read https://twitter.com/techemails https://twitter.com/techemails in 10 years

NelsonMinar 5y ago

For comparison, Google appears to be paying Mozilla about $400M/year. https://www.zdnet.com/article/sources-mozilla-extends-its-google-search-deal/ https://www.zdnet.com/article/sources-mozilla-extends-its-go...

INTPenis 5y ago
Wow! You'd think with that kind of money they'd be able to fix 10 year old bugs in Firefox. What the hell is that money going towards?
- BugsJustFindMe 5y ago
  > What the hell is that money going towards? Probably a really expensive dustpan for all the salt that people throw at them.
- rednerrus 5y ago
  Company wide vacations.

zyemuzu 5y ago

Search is dead.

marstall 5y ago

if this was Apple's only income (somehow), what market cap would that translate to?

ChrisArchitect 5y ago

Apple is a media company that sells hardware, they don't need to spend time figuring out and maintaining search, especially if they've convinced Google to pay them that amount for the privilege.

freediver 5y ago

It looks Google is ready to pay $15/year [1] for an Apple user and $2.5/year [2] for a Firefox user. [1] $15bn/1bn apple devices [2] $500m/200m firefox installs