Google paid Apple almost $10 billion to continue as default search engine

Google paid Apple almost $10 billion to continue as default search engine
Safari on iPhone X

Apple’s Services revenue grew substantially last year and is expected to continue doing so throughout 2019. But according to the latest estimates from Goldman Sachs, a whopping one-fifth of the money generated by the business in 2018 came directly from Google.

This share translates into a figure that sits somewhere between $9 and $10 billion and is directly related to the internet giant’s search efforts. As things stand, Apple is one of the biggest channels of traffic acquisition for Google – it accounts for roughly half of all mobile revenue – and in order to maintain these numbers the company pays Apple a substantial sum each year.

This payment ensures Google will continue as the default search provider on iOS devices rather than a rival search engine. The downside to the agreement is that Apple can continue to push prices up each year and, if Google ever refuses to pay the amount, the Cupertino firm can simply approach a rival such as Microsoft and make Bing the default search engine.

For Apple, such agreements are understood to be almost pure profit and, with the company’s user install base continuing to grow, the iPhone giant can continue to increase its prices each year, thus benefiting its Services business dramatically.

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27 Comments

1. RebelwithoutaClue unregistered

Yup Apple only has the user's best interest at heart

2. Vokilam

Posts: 1181; Member since: Mar 15, 2018

I was gonna say - it’s nice to see companies work together. But how is setting google as a default not in customers interest. They have to set something as default - might as well be google - especially if they’re willing to pay. And it’s so easy to change if you don’t like it.

8. sgodsell

Posts: 7195; Member since: Mar 16, 2013

Umm, that part where there is nothing stopping Apple from jacking up the prices. Well last year it was 3 billion. The year before it was over a billion. So I call that jacking up the prices alright. Plus from what I understand part of that agreement was that Googles search was also the default for Siri, Spotlight, iOS in general and Mac's. It's not just the default for Safari.

12. rouyal

Posts: 1573; Member since: Jan 05, 2018

Why do your comments never have anything to do with the comment you're replying to?

19. Vokilam

Posts: 1181; Member since: Mar 15, 2018

Um... changing default search engine will change it for Siri, spotlight etc.

20. RebelwithoutaClue unregistered

Since Apple is so keen on user privacy and Google search is not privacy friendly

25. Vokilam

Posts: 1181; Member since: Mar 15, 2018

I actually understand your sentiment. If Apple did what it preached it wouldn’t take 10 mil from gooogle and maybe just 3 mil (hypothetically if they were offering that) from DuckDuckGo if they’re so keen on their words. I get it. But they do offer that option.

3. pablumatic

Posts: 19; Member since: Nov 22, 2012

How does Apple go about selling this to Google? Is it a threat they give them to pay up or lose their status? Very odd business practice of paying to keep a search engine as a default.

4. joshuaswingle

Posts: 569; Member since: Apr 03, 2018

I guess if somebody is willing to pay for something you might as well make the most of it. I'm sure other companies would love to be the default search engine on iOS.

5. Vokilam

Posts: 1181; Member since: Mar 15, 2018

Google needs this - advertising and tracking is their business. They can’t do it unless you use their search engine, or chrome browser, or android operating system (android). Why do you think google offers all those for free - no device purchase necessary.

6. scarface21173

Posts: 658; Member since: Aug 17, 2014

How much is google making out of the deal, i suggest a lot more.

7. Rager722 unregistered

Makes me wonder how much does Google make off of this?

9. talon95

Posts: 994; Member since: Jul 31, 2012

They shouldn't pay and just let Apple users complain if they aren't given Google search.

10. Godlymansean

Posts: 337; Member since: Apr 14, 2017

Honestly that would probably work, but take time. Guess Google got enough $ to toss around like this lol.

11. Joshing4fun

Posts: 1245; Member since: Aug 13, 2010

Who else would Apple use? BING? YAHOO? Oh please, customers would protest.

13. rouyal

Posts: 1573; Member since: Jan 05, 2018

Protest the whole 10 seconds to change it to Google in the settings?

14. worldpeace

Posts: 3127; Member since: Apr 15, 2016

Average iOS or MacOS users will just call Apple's consumer service instead of searching a way to fix it themself.

15. kiko007

Posts: 7493; Member since: Feb 17, 2016

Um, you realize up until 3 (or 4) years ago Bing was the default search engine, right? People weren’t rioting in the streets because of it either... they didn’t care. Also, what is up with you idiots and thinking you’re smarter than iOS users? You do realize some of the smartest and wealthiest tech enthusiasts on Earth use iPhones, right?

22. RebelwithoutaClue unregistered

That's why he said AVERAGE iOS or MacOS user. And the average iOS user doesn't know tech or go deep into the settings. Just like an average Android user isn't tech savvy at all. And no, no riots, but when Apple did use Bing, a lot of our users were complaining and I had to tell them how to switch to Google. Mind you, those users were all pretty smart

26. Vokilam

Posts: 1181; Member since: Mar 15, 2018

It’s not deep in settings - it’s actually way too simple. You can even ask Siri to open safari settings - and the default engine setting is right on top. And now That it’s google as default - I have to tell a lot that they can switch - and yes many are surprised you can, and do instantly after I explain the difference between google tracking and the lack of tracking in DuckDuckGo.

27. RebelwithoutaClue unregistered

I know that, you know that, but an average user doesn't know that. Or is too lazy to look it up. Also, most of our users don't use Siri at all. Perhaps 2 out of 130 uses it.

16. CDexterWard

Posts: 59; Member since: Feb 05, 2018

I understand the economics of this, but for the consumer it’s easy to switch the “default”. I guess Google is banking on the lazy user who doesn’t tinker with their settings so that they (“Googs”) can vacuum up more data for their depository.

17. perry1234

Posts: 643; Member since: Aug 14, 2012

Curiously, I did not understand the economics at play here, precisely because of the reason that follows in your comment. It is too damn easy for the user to switch to and from Google. I would be highly surprised if the Average Joe (except grandparents and soccer moms) did not know how to do this. I am sure Google is getting more out of this $10Billion deal that both companies are letting on, i.e. that Google just being the default search engine. This might be some shady thing going on behind backdoors.

18. mrochester

Posts: 978; Member since: Aug 17, 2014

I think it’s funny that google pays Apple all this money and then the first thing I do is switch my default search engine to a much more ethical company, DuckDuckGo. Lose lose for google. But that’s a good thing!

21. Vokilam

Posts: 1181; Member since: Mar 15, 2018

Yeah I love duckduckgo.com. In my experience not a lot of people know they can change their default. Those that ever mention tracking or particular ads, or anything negative google - I show them how to change default and install ad blocker - people are usually surprised - especially by ad blockers being integrated into safari. Everyone in my relative and friends list that have iOS devices have ad blocker installed and google switch off. Another note: install an ad blocker that also blocks sharing buttons on websites - most people don’t know but those share buttons actually there to track you. If it’s loaded - you were tracked. Next time you see the blue [f] button that means Facebook knows you were on this site. Block them suckers with purify app.

23. mootu

Posts: 1500; Member since: Mar 16, 2017

Doesn't make a blind bit of difference. As long as Google apps are installed on your device they can track you. It makes no odds if it's Android or IOS, many independant tests have proven this. The only way to avoid it is to have zero Google apps installed on your device.

24. Vokilam

Posts: 1181; Member since: Mar 15, 2018

Finally, someone is catching on. When I was on android - I used Google’s ecosystem fully. When I switched to iOS - now have zero google presence. In my life - was not possible with while I was on android.

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