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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 re

by 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
  - londons_explore 5y ago
    They have far far lower revenue per impression than strongly targeted ads using ML.
  - simonh 5y ago
    Success means revenue of at least $15bn plus the cost of operating the search service and ad network. Anything less is a revenue hit.
  - gomox 5y ago
    I find it interesting that you consider the mob-like behavior of Google forcing everyone to bid on their own name "not efficient". It seems to me like they are really efficient (at their goal of extracting tons of revenue from everyone and their dog).
curiousmindz 5y ago
I think that Apple would only consider building their own search engine if they had the ability to generate (close to) these $15B per year in value. Since Apple wants to keep its privacy-friendly brand, these $15B would have to come from something other than ads; and I can't think of another realistic source of revenue. But who knows, the whole "vertical integration" aspect could unlock new scenarios...
- NicoJuicy 5y ago
  You are suggesting that Apple wouldn't touch ads, but that's exactly what they did with IAd
  - curiousmindz 5y ago
    I can't find how much revenue Apple is generating from iAd, but all hints point to a fairly small number. I'm guessing that Apple keeps it around to "help" small app developers who build free apps. And more importantly, iAd seems to focus on advertising apps themselves (like a game ad inside another game). This is a far less intrusive model than a general-purpose search engine (where you find all kinds of advertisers).
    - NicoJuicy 5y ago
      iAd failed. They tried to launch premium ads... The launch definitely was not focused on "small developers" too. While keeping 40%, i don't think they were generous at for the "small companies" ;) So I really don't know how you can get to that conclusion. https://en.m.wikipedia.org/wiki/IAd https://en.m.wikipedia.org/wiki/IAd
- ikerdanzel 5y ago
  Apple at software is quite bad. For 10years+ their maps and majority of their toolings are weaker than the competitors. Starting their own search engine is just like starting their own ping that try to compete with FB back when Steve was still around. I think the next 10 years we will start to see Apple sputtering. Most of their revenue can be traced to Steve foresight 10 years ago. Apple now is mimicking others like trying to create car and streaming videos.
knorker 5y ago
> if they seriously attempted it I don't see how it wouldn't be a very substantial business very quickly. I have a hard time parsing your first paragraph. Are you saying Apple could build its own search engine? Possibly it could. But it's not just about throwing money at it. Do you remember when Google didn't brag about how big a DC footprint they had? It was all hush hush. Microsoft struggled to bring up a search engine. They even licensed part of it. Some of the queries sent on live.com (as bing was called back then) were actually sent out to third party search providers. Then Microsoft started bragging about how they're able to operate just like Google, too. ... then Google turned on search-as-you-type, or whatever it was called. The one where you see search results after every keystroke (since removed, because it was kinda pointless). That feature was basically a big FU to Microsoft, saying "we can 10x our search traffic overnight. Can you?". Google reportedly stopped being secret about its capacity because the secrecy was there to prevent Microsoft truly understanding the scale needed to compete. Once they did understand, Google stopped being so secret. Apple is years behind. They don't have shovels in the ground. They don't operate services at this scale. Sure, they are not a small shop. But they outsource so many things in this space. Microsoft started from a much better position, but they still took years to not be a joke in this space. But yeah, with Apple building DCs, you should maybe expect them to have a reasonable replacement ready in 5-10 years, if they really put their mind to it. And then there's the ad side. It's not just the tech (where Google has a 20 year head start), but also the business deals (where again 20 years head start), the inertia of existing advertisers, and integration of search ads and display ads. But of course, with a closed ecosystem, and actually being the biggest private company in the world, they will absolutely get more monopoly accusations for integrating search, app store, and phone, than Google has. So no, you can actually throw billions and billions at this problem and still fail. It's not obvious to me that such an investment will have positive ROI for 10 years.
- lotsofpulp 5y ago
  I think the vast majority of people would not know the difference between a Google search and a DuckDuckGo search. They use search to shop the top few retailers or find the actual website of a company, but I doubt many are doing the deep dives that it might actually make a difference to use Google with. Google’s moat right now is Maps, YouTube, and Drive apps, I think. Or at least that is my family’s experience. Google search and gmail were easily replaced.
nojito 5y ago
They already do. If you’re on iOS, swipe down and use that search bar.
marricks 5y ago
Substantial how? Apple doesn’t sell ads and I’m pretty sure that antithetical to their business model, if they did their advantage in other ways (privacy which sucks anyways) would dry up.
- jsnell 5y ago
  Apple build advertisement profiles on iOS users, and allow App Store and Apple News ads to be targeted using said profiles. They are estimated to sell billions of dollars of ads per year. Their tracking is, as far as I can tell, not opt in. Instead it's an opt-out hidden in an obscure settings menu, with the sign "beware of the Leopard" on the door. See https://support.apple.com/en-us/HT205223 https://support.apple.com/en-us/HT205223 So it absolutely isn't antithetical to their business model. The opposite: Apple's business model is to lock users to their platform, and extract rent out of as much of their economic activity as possible. If anything, third party advertisers making money from iOS users directly without giving Apple a cut is what's antithetical to Apple's business model. It seems basically guaranteed that within a couple of years Apple will be doing another attempt at launching an ad network for third party apps and/or web sites (Safari-only) using the same tracking data.
- gpt5 5y ago
  Apple does sell search ads. Search the App Store for almost anything…

by 256DEV 5y ago

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
- londons_explore 5y ago
  They have far far lower revenue per impression than strongly targeted ads using ML.
- simonh 5y ago
  Success means revenue of at least $15bn plus the cost of operating the search service and ad network. Anything less is a revenue hit.
- gomox 5y ago
  I find it interesting that you consider the mob-like behavior of Google forcing everyone to bid on their own name "not efficient". It seems to me like they are really efficient (at their goal of extracting tons of revenue from everyone and their dog).

curiousmindz 5y ago

I think that Apple would only consider building their own search engine if they had the ability to generate (close to) these $15B per year in value. Since Apple wants to keep its privacy-friendly brand, these $15B would have to come from something other than ads; and I can't think of another realistic source of revenue. But who knows, the whole "vertical integration" aspect could unlock new scenarios...

NicoJuicy 5y ago
You are suggesting that Apple wouldn't touch ads, but that's exactly what they did with IAd
- curiousmindz 5y ago
  I can't find how much revenue Apple is generating from iAd, but all hints point to a fairly small number. I'm guessing that Apple keeps it around to "help" small app developers who build free apps. And more importantly, iAd seems to focus on advertising apps themselves (like a game ad inside another game). This is a far less intrusive model than a general-purpose search engine (where you find all kinds of advertisers).
  - NicoJuicy 5y ago
    iAd failed. They tried to launch premium ads... The launch definitely was not focused on "small developers" too. While keeping 40%, i don't think they were generous at for the "small companies" ;) So I really don't know how you can get to that conclusion. https://en.m.wikipedia.org/wiki/IAd https://en.m.wikipedia.org/wiki/IAd
ikerdanzel 5y ago
Apple at software is quite bad. For 10years+ their maps and majority of their toolings are weaker than the competitors. Starting their own search engine is just like starting their own ping that try to compete with FB back when Steve was still around. I think the next 10 years we will start to see Apple sputtering. Most of their revenue can be traced to Steve foresight 10 years ago. Apple now is mimicking others like trying to create car and streaming videos.

knorker 5y ago

> if they seriously attempted it I don't see how it wouldn't be a very substantial business very quickly. I have a hard time parsing your first paragraph. Are you saying Apple could build its own search engine? Possibly it could. But it's not just about throwing money at it. Do you remember when Google didn't brag about how big a DC footprint they had? It was all hush hush. Microsoft struggled to bring up a search engine. They even licensed part of it. Some of the queries sent on live.com (as bing was called back then) were actually sent out to third party search providers. Then Microsoft started bragging about how they're able to operate just like Google, too. ... then Google turned on search-as-you-type, or whatever it was called. The one where you see search results after every keystroke (since removed, because it was kinda pointless). That feature was basically a big FU to Microsoft, saying "we can 10x our search traffic overnight. Can you?". Google reportedly stopped being secret about its capacity because the secrecy was there to prevent Microsoft truly understanding the scale needed to compete. Once they did understand, Google stopped being so secret. Apple is years behind. They don't have shovels in the ground. They don't operate services at this scale. Sure, they are not a small shop. But they outsource so many things in this space. Microsoft started from a much better position, but they still took years to not be a joke in this space. But yeah, with Apple building DCs, you should maybe expect them to have a reasonable replacement ready in 5-10 years, if they really put their mind to it. And then there's the ad side. It's not just the tech (where Google has a 20 year head start), but also the business deals (where again 20 years head start), the inertia of existing advertisers, and integration of search ads and display ads. But of course, with a closed ecosystem, and actually being the biggest private company in the world, they will absolutely get more monopoly accusations for integrating search, app store, and phone, than Google has. So no, you can actually throw billions and billions at this problem and still fail. It's not obvious to me that such an investment will have positive ROI for 10 years.

lotsofpulp 5y ago
I think the vast majority of people would not know the difference between a Google search and a DuckDuckGo search. They use search to shop the top few retailers or find the actual website of a company, but I doubt many are doing the deep dives that it might actually make a difference to use Google with. Google’s moat right now is Maps, YouTube, and Drive apps, I think. Or at least that is my family’s experience. Google search and gmail were easily replaced.

nojito 5y ago

They already do. If you’re on iOS, swipe down and use that search bar.

marricks 5y ago

Substantial how? Apple doesn’t sell ads and I’m pretty sure that antithetical to their business model, if they did their advantage in other ways (privacy which sucks anyways) would dry up.

jsnell 5y ago
Apple build advertisement profiles on iOS users, and allow App Store and Apple News ads to be targeted using said profiles. They are estimated to sell billions of dollars of ads per year. Their tracking is, as far as I can tell, not opt in. Instead it's an opt-out hidden in an obscure settings menu, with the sign "beware of the Leopard" on the door. See https://support.apple.com/en-us/HT205223 https://support.apple.com/en-us/HT205223 So it absolutely isn't antithetical to their business model. The opposite: Apple's business model is to lock users to their platform, and extract rent out of as much of their economic activity as possible. If anything, third party advertisers making money from iOS users directly without giving Apple a cut is what's antithetical to Apple's business model. It seems basically guaranteed that within a couple of years Apple will be doing another attempt at launching an ad network for third party apps and/or web sites (Safari-only) using the same tracking data.
gpt5 5y ago
Apple does sell search ads. Search the App Store for almost anything…