6 ms·

The article says that in 2021, Google paid Apple around $18 billion to keep Google’s search engine as default in iPhones. What if Apple would put all that mone

by toni 3y ago

The article says that in 2021, Google paid Apple around $18 billion to keep Google’s search engine as default in iPhones. What if Apple would put all that money back into developing its own search engine?! That would be beating Google with its own money!

TradingPlaces 3y ago
That is from the recent Bernstein estimate. Justice Department says only $4-$7b
- toni 3y ago
  That is indeed far less. Hopefully Apple has still put some of that money into rivaling Google search.
dewey 3y ago
> What if Apple would put all that money back into developing its own search engine?! They have 50B cash on hand, I don't think the money would be the limiting factor if they wanted to do it or think they are in a position where they could do it.
- jasode 3y ago
  >They have 50B cash on hand, I don't think the money would be the limiting factor if they wanted to do Just to provide some ballpark numbers... Supposedly, Microsoft spent $100 billion on Bing and the CEO Nadella said the most common search query on Bing is "Google". https://www.google.com/search?q=microsoft+spent+%24100+billion+on+bing+-openai https://www.google.com/search?q=microsoft+spent+%24100+billi... It's safe to assume Apple executives look at Bing and estimate the costs and potential ROI when considering their own plans for an in-house search engine.
  - dewey 3y ago
    Also they don't have to spend it all at once, they have been crawling the web for a long time already and are not starting from scratch. So far it's just more in the background and integrated into the OS (Siri etc.) https://www.bloomberg.com/news/newsletters/2023-10-01/could-apple-replace-google-with-own-search-engine-it-s-possible-but-unlikely-ln7gywed#xj4y7vzkg https://www.bloomberg.com/news/newsletters/2023-10-01/could-...
  - mminer237 3y ago
    Bing makes over $11 billion a year now though, so that's not a bad ROI.
    - jasode 3y ago
      >Bing makes over $11 billion a year now though, That ~$11 billion is revenue not profit. We'd have to compare Bing's lower profit numbers to the various reports ($4-$7 billion? $18 billion?) of Apple payments from Google. Microsoft doesn't break out profit/loss for Bing in its financial reports so we (as outsiders) can't calculate an ROI. It's probable that Apple has enough inside info from Microsoft to determine if the ROI makes sense for them.
    - deleted 3y ago
      [deleted]
- jprete 3y ago
  That’s a good point to being up. Apple’s entire pile of cash is just under three years of Google payments. This tells me Apple’s been spending the money on other things. “Replace Google Search” probably isn’t high on their list of priorities, as opposed to Microsoft who seem really intent at it.
  - jrochkind1 3y ago
    It is pretty amazing to realize Apple's oft-commented upon huge pile of cash could be entirely attributed to google payments... And to me makes it make sense that a company with enough control over search that they can pay other companies 18 billion a year to maintain that control, may be an antitrust issue. I don't actually know much about antitrust law, but it seems like paying competitors to stay out of your business to maintain your monopoly might run afoul of it.
    - robocat 3y ago
      Your argument for control is 180° wrong: Apple has the control and that is why it can demand excessive payment. I don't understand the stereotypical anti-Google sentiment. Clearly Apple are getting paid an excess amount here because they control the default. Apple could swap to Bing and few people would notice the difference. Apple 2022: $99.8 billion profit (over 1 year) Google Q4 2022: $18.16 billion profit on $76 billion in revenue (over 3 months). Apple App store profit: The App Store generated US$1.1 trillion in total billings and sales in the App Store ecosystem in 2022, Apple has revealed. More than 90 percent of the billings and sales went to developers and businesses without a commission being taken by Apple. https://itwire.com/it-industry-news/market/apple-s-app-store-generated-us$1-1-trillion-revenue-in-2022.html https://itwire.com/it-industry-news/market/apple-s-app-store... I don't understand the stereotypical anti-Google sentiment. Clearly Apple are getting paid an excess amount here because they control the default. I use duckduckgo which is backed by Bing. Apple doesn't use Bing because Apple can extract monopoly rents from Google. Who's the bad guy here? 18 billion a year is a lot of money relative to the profits of the companies. For comparison, Apple seems to make more from its searchbox than it does from the App Store (widely regarded as usurous).
rat9988 3y ago
They would still need to make more cash with it than what Google gives them.
- baggachipz 3y ago
  And as we know, "free" search is really just a way to sell ads. So Apple would be effectively getting into the ads business and competing with google on that front. I hope I speak for other Apple users when I say we don't want that. I pay the Apple tax to have some of my privacy respected and a less ad-riddled OS.
  - jayanmn 3y ago
    Could Apple join hands with Kagi search?
    - baggachipz 3y ago
      I wish! I don't think Kagi could handle even a small fraction of that kind of volume right now. But perhaps if Apple could help out....
  - deleted 3y ago
    [deleted]
  - randomdata 3y ago
    Apple could theoretically use search as a way to compel people to buy Apple devices, or to become iCloud subscribers, or whatever. It doesn't have to be an advertising business. That is a manoeuvre they are quite familiar with. In reality, I'm not sure Apple could actually create a search engine that is compelling enough against the competition to see people drawn into the Apple ecosystem, but in theory...
helsinkiandrew 3y ago
> What if Apple would put all that money back into developing its own search engine?! That would be beating Google with its own money! But then they would loose the $18 billion each year they got from Google. By keeping Google as the default search engine - they get free money and send Apple users to the search engine they probably want to use, without being targeted with the flack Google gets for tracking/mingling ads with search etc.
- Teever 3y ago
  Maybe Apple users only probably want to use that search engine because Apple didn't take the money and use it to build a better search engine.
  - SllX 3y ago
    Billions have been invested in making a better Google than Google by other entities but most people just want Google. Even if Apple did make a search engine, that’s no guarantee iPhone users would want to use it, and if Google and nobody else paid Apple a penny to be the default, there’s better than even odds Google would still be the default.
    - Teever 3y ago
      Yes but those other entities aren't Apple. Apple does the impossible. Frequently. If anyone could make a better Google it would be Apple.
      - SllX 3y ago
        Look, I like Apple too but don’t get too high on their supply. Apple does the possible but extremely challenging, frequently. Given enough time and money, they probably could be at least competitive with Google, but how much time? How much money? What are the opportunity costs to doing this and not investing somewhere else where they are either stronger or there’s a more lucrative future business to be had (like their mixed reality headset)?
ben_w 3y ago
> What if Apple would put all that money back into developing its own search engine?! That would be beating Google with its own money! Apple Maps 2: Information Superhighway edition
justrealist 3y ago
They would need an entire ad ecosystem to monetize that search, to make the $18 billion back. That's a lot of work, likely far more work than building decent search in the first place. They'd rather let Google get their hands dirty, claim the moral hight ground, and take the rent.
- carlosjobim 3y ago
  > They would need an entire ad ecosystem to monetize that search, to make the $18 billion back. Why? How does Apple monetize their software and their hardware today? It is not with an ad ecosystem. If Apple offers superior search on their devices, that is yet another reason for customers to purchase their hardware. Could that be worth $18B per year? That's 4-5% of their total revenue, which sounds like a lot. Development costs for a search engine can be discounted, as it wouldn't cost Apple more than a few million dollars to make a better search engine than Google.
summerlight 3y ago
For Apple, developing a new modern search engine will create an extremely broad array of legal, technical, ethical and political problems (think about running a search engine in China) if you want to keep the business sustainable, not even profitable! In that sense, when you can outsource this to someone else and get some sweet money even for the Apple's scale, why wouldn't you do that?

by toni 3y ago

TradingPlaces 3y ago

That is from the recent Bernstein estimate. Justice Department says only $4-$7b

toni 3y ago
That is indeed far less. Hopefully Apple has still put some of that money into rivaling Google search.

dewey 3y ago

> What if Apple would put all that money back into developing its own search engine?! They have 50B cash on hand, I don't think the money would be the limiting factor if they wanted to do it or think they are in a position where they could do it.

jasode 3y ago
>They have 50B cash on hand, I don't think the money would be the limiting factor if they wanted to do Just to provide some ballpark numbers... Supposedly, Microsoft spent $100 billion on Bing and the CEO Nadella said the most common search query on Bing is "Google". https://www.google.com/search?q=microsoft+spent+%24100+billion+on+bing+-openai https://www.google.com/search?q=microsoft+spent+%24100+billi... It's safe to assume Apple executives look at Bing and estimate the costs and potential ROI when considering their own plans for an in-house search engine.
- dewey 3y ago
  Also they don't have to spend it all at once, they have been crawling the web for a long time already and are not starting from scratch. So far it's just more in the background and integrated into the OS (Siri etc.) https://www.bloomberg.com/news/newsletters/2023-10-01/could-apple-replace-google-with-own-search-engine-it-s-possible-but-unlikely-ln7gywed#xj4y7vzkg https://www.bloomberg.com/news/newsletters/2023-10-01/could-...
- mminer237 3y ago
  Bing makes over $11 billion a year now though, so that's not a bad ROI.
  - jasode 3y ago
    >Bing makes over $11 billion a year now though, That ~$11 billion is revenue not profit. We'd have to compare Bing's lower profit numbers to the various reports ($4-$7 billion? $18 billion?) of Apple payments from Google. Microsoft doesn't break out profit/loss for Bing in its financial reports so we (as outsiders) can't calculate an ROI. It's probable that Apple has enough inside info from Microsoft to determine if the ROI makes sense for them.
  - deleted 3y ago
    [deleted]
jprete 3y ago
That’s a good point to being up. Apple’s entire pile of cash is just under three years of Google payments. This tells me Apple’s been spending the money on other things. “Replace Google Search” probably isn’t high on their list of priorities, as opposed to Microsoft who seem really intent at it.
- jrochkind1 3y ago
  It is pretty amazing to realize Apple's oft-commented upon huge pile of cash could be entirely attributed to google payments... And to me makes it make sense that a company with enough control over search that they can pay other companies 18 billion a year to maintain that control, may be an antitrust issue. I don't actually know much about antitrust law, but it seems like paying competitors to stay out of your business to maintain your monopoly might run afoul of it.
  - robocat 3y ago
    Your argument for control is 180° wrong: Apple has the control and that is why it can demand excessive payment. I don't understand the stereotypical anti-Google sentiment. Clearly Apple are getting paid an excess amount here because they control the default. Apple could swap to Bing and few people would notice the difference. Apple 2022: $99.8 billion profit (over 1 year) Google Q4 2022: $18.16 billion profit on $76 billion in revenue (over 3 months). Apple App store profit: The App Store generated US$1.1 trillion in total billings and sales in the App Store ecosystem in 2022, Apple has revealed. More than 90 percent of the billings and sales went to developers and businesses without a commission being taken by Apple. https://itwire.com/it-industry-news/market/apple-s-app-store-generated-us$1-1-trillion-revenue-in-2022.html https://itwire.com/it-industry-news/market/apple-s-app-store... I don't understand the stereotypical anti-Google sentiment. Clearly Apple are getting paid an excess amount here because they control the default. I use duckduckgo which is backed by Bing. Apple doesn't use Bing because Apple can extract monopoly rents from Google. Who's the bad guy here? 18 billion a year is a lot of money relative to the profits of the companies. For comparison, Apple seems to make more from its searchbox than it does from the App Store (widely regarded as usurous).

rat9988 3y ago

They would still need to make more cash with it than what Google gives them.

baggachipz 3y ago
And as we know, "free" search is really just a way to sell ads. So Apple would be effectively getting into the ads business and competing with google on that front. I hope I speak for other Apple users when I say we don't want that. I pay the Apple tax to have some of my privacy respected and a less ad-riddled OS.
- jayanmn 3y ago
  Could Apple join hands with Kagi search?
  - baggachipz 3y ago
    I wish! I don't think Kagi could handle even a small fraction of that kind of volume right now. But perhaps if Apple could help out....
- deleted 3y ago
  [deleted]
- randomdata 3y ago
  Apple could theoretically use search as a way to compel people to buy Apple devices, or to become iCloud subscribers, or whatever. It doesn't have to be an advertising business. That is a manoeuvre they are quite familiar with. In reality, I'm not sure Apple could actually create a search engine that is compelling enough against the competition to see people drawn into the Apple ecosystem, but in theory...

helsinkiandrew 3y ago

> What if Apple would put all that money back into developing its own search engine?! That would be beating Google with its own money! But then they would loose the $18 billion each year they got from Google. By keeping Google as the default search engine - they get free money and send Apple users to the search engine they probably want to use, without being targeted with the flack Google gets for tracking/mingling ads with search etc.

Teever 3y ago
Maybe Apple users only probably want to use that search engine because Apple didn't take the money and use it to build a better search engine.
- SllX 3y ago
  Billions have been invested in making a better Google than Google by other entities but most people just want Google. Even if Apple did make a search engine, that’s no guarantee iPhone users would want to use it, and if Google and nobody else paid Apple a penny to be the default, there’s better than even odds Google would still be the default.
  - Teever 3y ago
    Yes but those other entities aren't Apple. Apple does the impossible. Frequently. If anyone could make a better Google it would be Apple.
    - SllX 3y ago
      Look, I like Apple too but don’t get too high on their supply. Apple does the possible but extremely challenging, frequently. Given enough time and money, they probably could be at least competitive with Google, but how much time? How much money? What are the opportunity costs to doing this and not investing somewhere else where they are either stronger or there’s a more lucrative future business to be had (like their mixed reality headset)?

ben_w 3y ago

> What if Apple would put all that money back into developing its own search engine?! That would be beating Google with its own money! Apple Maps 2: Information Superhighway edition

justrealist 3y ago

They would need an entire ad ecosystem to monetize that search, to make the $18 billion back. That's a lot of work, likely far more work than building decent search in the first place. They'd rather let Google get their hands dirty, claim the moral hight ground, and take the rent.

carlosjobim 3y ago
> They would need an entire ad ecosystem to monetize that search, to make the $18 billion back. Why? How does Apple monetize their software and their hardware today? It is not with an ad ecosystem. If Apple offers superior search on their devices, that is yet another reason for customers to purchase their hardware. Could that be worth $18B per year? That's 4-5% of their total revenue, which sounds like a lot. Development costs for a search engine can be discounted, as it wouldn't cost Apple more than a few million dollars to make a better search engine than Google.

summerlight 3y ago

For Apple, developing a new modern search engine will create an extremely broad array of legal, technical, ethical and political problems (think about running a search engine in China) if you want to keep the business sustainable, not even profitable! In that sense, when you can outsource this to someone else and get some sweet money even for the Apple's scale, why wouldn't you do that?