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Seems like a fairly simple business decision for Apple. They are receiving $19B in annual revenue today by having Google as default search engine (which is all

Seems like a fairly simple business decision for Apple. They are receiving $19B in annual revenue today by having Google as default search engine (which is all profit for them). Or they could spend billions on the acquisition of Bing + more billions annually to run Bing. Spending huge sums of money. Or receiving huge sums of money. Which would you prefer?

aka878 3y ago
What about the long term, the opportunity cost, the billions/trillions they are not making by helping someone else make it?
- wslh 3y ago
  We should also add a plausible hypothesis where search engines are partially replaced by other interfaces, such as LLMs prompts. In that case we are in front of the innovators dilemma for Google and Apple just need to wait until the sky clears, think again, and act.
TradingPlaces 3y ago
DoJ says $4-$7b, which Apple disputes.
Illniyar 3y ago
Simple it is not. Google is apple's main competitor and building an actual rival might be extremely beneficial for them. Google supposedly makes more money from this arrangement then the spend, which means of apple can run a successful search engine they can take more of the profit. Apple has loads of cash which they look for ways to invest, Google shows that search engine can be an immensely valuable investment. Obviously there are other concerns, chief being consumer sentiment here I imagine.
afavour 3y ago
I don’t think it’s quite that simple. Google are, after all, Apple’s biggest competitor in the mobile space and Android has Google search deeply integrated. By comparison Apple’s Google search integration is always going to look inferior, it would make sense if they sought to bring it all in house.
jasode 3y ago
>Spending huge sums of money. Or receiving huge sums of money. Which would you prefer? No, that's not the way too look at it. Apple spending billions to buy the Bing search engine would then let Apple collect 100% of the search ads revenue instead of splitting someone else's ad revenue with a middleman (aka Google). So the business decision matrix is based on whether 100% of ad revenue minus the acquisition & ongoing maintenance costs of Bing -- would be worth more than X% of Google's revenue split. Acquiring the "Bing search engine" isn't just the index ranking algorithm. It also includes getting the whole back-office infrastructure of ads-monetization management & dashboards for advertisers to log in to bid+buy ads.
- huytersd 3y ago
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kortilla 3y ago
Do you think Google pays $19B and doesn’t make more than that?
blibble 3y ago
plus bing continuing to exist means you can push Google for more money during the negotiations
rchaud 3y ago
If I own several oilfields and Chevron wants to pay me for the crude coming out of the ground, why should I waste money building a refinery?

aka878 3y ago

What about the long term, the opportunity cost, the billions/trillions they are not making by helping someone else make it?

wslh 3y ago
We should also add a plausible hypothesis where search engines are partially replaced by other interfaces, such as LLMs prompts. In that case we are in front of the innovators dilemma for Google and Apple just need to wait until the sky clears, think again, and act.

TradingPlaces 3y ago

DoJ says $4-$7b, which Apple disputes.

Illniyar 3y ago

Simple it is not. Google is apple's main competitor and building an actual rival might be extremely beneficial for them. Google supposedly makes more money from this arrangement then the spend, which means of apple can run a successful search engine they can take more of the profit. Apple has loads of cash which they look for ways to invest, Google shows that search engine can be an immensely valuable investment. Obviously there are other concerns, chief being consumer sentiment here I imagine.

afavour 3y ago

I don’t think it’s quite that simple. Google are, after all, Apple’s biggest competitor in the mobile space and Android has Google search deeply integrated. By comparison Apple’s Google search integration is always going to look inferior, it would make sense if they sought to bring it all in house.

jasode 3y ago

>Spending huge sums of money. Or receiving huge sums of money. Which would you prefer? No, that's not the way too look at it. Apple spending billions to buy the Bing search engine would then let Apple collect 100% of the search ads revenue instead of splitting someone else's ad revenue with a middleman (aka Google). So the business decision matrix is based on whether 100% of ad revenue minus the acquisition & ongoing maintenance costs of Bing -- would be worth more than X% of Google's revenue split. Acquiring the "Bing search engine" isn't just the index ranking algorithm. It also includes getting the whole back-office infrastructure of ads-monetization management & dashboards for advertisers to log in to bid+buy ads.

huytersd 3y ago
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deleted 3y ago

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kortilla 3y ago

Do you think Google pays $19B and doesn’t make more than that?

blibble 3y ago

plus bing continuing to exist means you can push Google for more money during the negotiations

rchaud 3y ago

If I own several oilfields and Chevron wants to pay me for the crude coming out of the ground, why should I waste money building a refinery?