Search wars: Google may pay Samsung $3.5 billion in license fees

Google is on a licensing renewal spree, and Korean analysts today are chiming in that it may be on the hook for up to $3.5 billion in fees paid to Samsung for carrying its search engine as default, and featuring it prominently on its phones. One look at our Galaxy S8 photo above will tell you why - the Google search bar sits right smack in the middle of the home screen, and there are millions of Samsung phones out there that do the same.

Needless to say, Google hopes to recoup the investment by its ad earnings from its stock search and browsing apps Samsung has preinstalled on its phones, so it might be a win-win scenario. In any case, these vast licensing amounts prove once again how important search and ad revenue from mobile have become in the span of just a few short years.

It became clear a few days ago that Google might be paying no less than $3 billion to Apple to remain the stock go-to search tool on the iPhones and iPads. This sum is reportedly three times higher than what Google paid in 2014 to renew its licensing deal with Apple, so Samsung may have looked at these negotiations results and said "hold my beer," in an effort to extract an even greater sum from Google. 

Samsung sells more handsets than everyone, so being present on its handsets as a default search engine may be proving paramount for Google's ad revenues, hence the hefty up to $3.5 billion licensing fees it may be shelling out to Samsung this year alone.  

source: TheInvestor



27. domfonusr

Posts: 1106; Member since: Jan 17, 2014

Now that Apple has held Google hostage, Samsung sees that they can do the same and better, in fact. I bet all of the OEM's will start charging Google some incredible amount for their default search engine status. Google doesn't make as much as Apple does, but everybody's gonna milk them for all their worth. Google's profits are about to go dowwwwnnnnn!

30. PhoneCritic

Posts: 1382; Member since: Oct 05, 2011

I don't think so Google has probably come to the realization that Apple/Samsung are the ones that sell the most devices and reap the most profits. Both those companies have a Leg to negotiate with Google. LG, Moto, HTC and especially the hundreds of other Chinese OEMS do not ( they don't even have Google services installed)

31. domfonusr

Posts: 1106; Member since: Jan 17, 2014

But if LG can get a billion or so out of Google, and ZTE, Huawei, and Alcatel get another billion out of Google, and Motorola, Kyocera, Sony, and others also pile on, that will be several billion more out of Google's coffers. There are enough others to put a little more of a dent into Google's profits, and every little bit would stack up and count in the end. Personally, I think this sets a bad precedent for Google.

19. Rampage_Taco

Posts: 1128; Member since: Jan 17, 2017

What I'm confused about by this is, Samsung phones run on Android with a few Tizen ones. If Android is the OS, wouldn't that make Google the default Search Engine?

23. trojan_horse

Posts: 5868; Member since: May 06, 2016

The issue is that Samsung's Android devices for not run stock Android, but run the custom Samsun UI, so Samsung is not forced to make Google Search the default search engine on its devices.

24. trojan_horse

Posts: 5868; Member since: May 06, 2016

*The issue is that Samsung's Android devices do not run stock Android*

17. beeitu

Posts: 12; Member since: Jan 18, 2016

Interesting. After Apple, now Samsung is also getting $3 billion from Google. It does make sense as a majority of Android users prefer Google as their default search engine. Currently, iOS devices are contributing about 50% to Google’s overall mobile search revenue, I'm sure the number would be much higher in the case of Samsung devices as Samsung sells more headsets than Apple every year.

4. LikeMyself

Posts: 631; Member since: Sep 23, 2013

Even if the default search is not Google, I'm pretty sure 80-90% of users will switch to Google because Google is the best search engine. Why losing so many billions then? Too much money?

5. black.inco unregistered

My exact thoughts as well. But at the same time, I'm thinking they're sitting on a ton of money so why not.

12. trojan_horse

Posts: 5868; Member since: May 06, 2016

I suppose Google is paying this amount of money in order to prevent it's competitors in the search business from securing a deal with Samsung for the default search engine in its devices. It's the same thing Google did by paying 3 billion dollars to Apple.

15. sissy246

Posts: 7129; Member since: Mar 04, 2015

Exactly They are just beating other to it to keep the spot.

16. BlackhawkFlys

Posts: 932; Member since: May 07, 2014

Even if the competition pays Samsung or any other company to make their search engines as the default, people will still switch to google.

22. trojan_horse

Posts: 5868; Member since: May 06, 2016

You have a point. But don't you think that Google did a research and analysis to figure out the amount of users who use the default search engine on their devices? Perhaps Google concluded that the consumers who just use the default search engine are in majority as opposed to those who manually select which search engine they want. But I'll also argue that Google has become so big in the search business that I don't really see anyone not being bothered when they see they aren't on the Google Search page when they hit the search bar.

10. medtxa

Posts: 1655; Member since: Jun 02, 2014

To advertise google service even more, to make them stay the relevant best search engine, basically google want people to see their service everywhere.

11. toukale

Posts: 676; Member since: Jun 10, 2015

In what world do you guys live? The percentage of people that would change the default would be in the teens at best. It would also open the door for Microsoft to fill that void and challenge google dominance on mobile. You do know that's how google make 80+ percent of their money right? People that thinks like you will never be able to run a successful business effectively.

18. beeitu

Posts: 12; Member since: Jan 18, 2016

Well, it is because the license fee is based on a percentage of Google’s net mobile ad revenue from Samsung users, it could keep rising as Google’s revenue share grows.

3. kreta17

Posts: 5; Member since: Aug 01, 2017

.... then at the end of the day, EU will slap them $30bn Hahaha.... EU win!

1. Ninetysix

Posts: 2967; Member since: Oct 08, 2012

You shouldn't have to pay. The buyer of the device should already get the option to choose the default. What a bunch of B.S. Google why? People who like your services, use it no matter the platform. If Samsung wants to make their POS the default, so be it. We can manually pick what we want to use. My fiorst home screen on my S8+ is basically all google apps. I never launch any links from email or texts, becaus eI know by default, it will open Samsung's apps. But to pay for default position, is ludicrous. No one has to do this on iOS or Windows. Google's CEO must be on some type of middle-eastern drugs. Lay off the drugs Pichar!

2. Nick040489

Posts: 29; Member since: Apr 01, 2010

Someone woke up on the wrong side of the bed. Have a good day dude!

9. trojan_horse

Posts: 5868; Member since: May 06, 2016

What Ninetysix did in post #1 is repeat what Techie said in this article: Ninetysix was sarcastically repeating Techie's words with that comment.

13. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

And I still.stand by what i said. Now since its a device where I do get to choose, Google shouldn't be paying to be the default. Unlike the retarded trolls here, I'm not a hypocrite. I feel it's wrong. I don't care what anyone else thinks. Whether they agree with me or not. It's my opinion that i stand by.

14. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

The only reason Google is doing this is because Samsung has its own software and people who use Samsung d3buces have the option to use Samsung services vs Google. But Samsung dowsnt5have a search engine

25. user890

Posts: 9; Member since: Aug 07, 2017

There are a lot of search engines out there, like Bing, Baidu, Yandex etc. etc. Means if google dont want to pay for this then Bing or another one will do since Samsung sells like 300 miljoen of android devices a year. Google will lose some of their marketshare for sure if Bing would take their place on Samsung's phones. And please dont tell company's what to do since they got enough smart people inside their company's. Ofcoure ur free to have ur opinion.

21. mikehunta727 unregistered

Don't worry, no one here thinks your a hypocrite just because you say so... /s

26. mrochester

Posts: 1048; Member since: Aug 17, 2014

Why shouldn't google be paying? The default has to be something out of the box.

28. Ninetysix

Posts: 2967; Member since: Oct 08, 2012

It's hilarious how you didn't get your panties up in a bunch because now it's Samsung. You should check out the other article again.

29. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

I think Google calls on this. If they think it's good business to do so. Personally, I would use them anyway because they currently do give the most relevant search result. Samsung and Apple couldn't be bothered to build their own search engine because Google has given them a generous bribe.

6. Panzer

Posts: 283; Member since: May 13, 2016

"I never launch any links from email or texts, becaus eI know by default, it will open Samsung's apps." Settings > Apps > Menu > Default Apps. Never heard of anyone not getting to set default Apps on Android. That feature is saved for Apple. Only Google apps on my phone are core apps. All the rest have been uninstalled. Chrome is absolute garbage. And generally if you battery life is crappy and your getting Media Server high battery usage that is Chrome screwing up. The next battery killer is Play Services. Can't use the Play store without that one so it make life a little more difficult.

7. RebelwithoutaClue unregistered

There is a difference of not being able to set it and even knowing it's possible (let alone know where to find this in the settings). The masses never change things like these, they use what's in front of them.

8. Panzer

Posts: 283; Member since: May 13, 2016

Depending on what you click the first time it will give you a list of installed app that you would like to open up with. Where it gets annoying some Oem's give you an option of "Just Once" or it will set the default app automatically. My S8 I can change to ask before setting default but that is not the default setting though.

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