Apple makes billions from Google Search each year | Hacker News Reader

Apple makes billions from Google Search each year

businessinsider.com

To put that back into relatable numbers, there are about 1B installed iOS devices. So Google is paying $9/year for each device to be the default search engine.

Are those all capable to run the latest version / receive updates? Otherwise, they're paying even more per device.

Are those all capable to run the latest version / receive updates? Otherwise, they're paying even more per device.

You can still use the web browser all the way back to the original iPhone. Updates are irrelevant.

Source: Googled using Safari on my launch day iPhone just a few days ago.

Updates are relevant, if we're talking about possibly changing the default search engine.

It's currently Google...and if they want to change it, they'd have to update these EOL devices. This could significantly increase the price per device

The default browser doesn't change with updates. This is about new devices shipped.

That has been true so far with Apple, but if they are unhappy with Google, they could retroactively switch users to DDG

Interesting, it's also important to keep in mind that (1) this number is slightly higher per user because some people have multiple iOS devices and (2) given the device price points, iOS users are typically considered more valuable than the average person.

It was 1B in 2016, the most recent number is 1.4B active devices[0]. So that would make it $6.71.

[0] https://www.theverge.com/2019/1/29/18202736/apple-devices-io...

does the $9.4B figure include mac devices?

And I can make those nine dollars go straight into the trash by changing the search engine to DDG in the settings.

My question is, would Apple default to different search engine if they weren't getting paid? Given Google's utter dominance in search, it would likely be seen as anti-user behavior to default to something else.

This one and the fact that Microsoft takes all the licensing revenue from Android seem to bubble up every few months. Head-scratching stuff from companies playing on levels of scale where strange things start to make sense.

Apple had previously used Bing as the default search in certain areas, such as Siri and the Search bar.

But did they switch because they could get more money from Google, because they could give users better search results with Google, or because they didn't want to confuse users who google things and get confused that the google is broken and says bing instead?

Money. Google offered the same or better experience when bing was the default.

If they weren't getting paid they'd just switch to Bing or DuckDuckGo. As much as Google might like to believe that people will specifically seek them out because they are a better product, search is a utility and most people will be fine with Bing/DuckDuckGo. We know this exactly because Google pays TAC.

I agree in general but if 1.4 billion devices simultaneously started using duckduckgo their servers would melt through the mantle and merge with the inner core.

If done in a heartbeat. But they'd probably even get funds from Apple to scale.

So from +$9B to what? -$100M?

Apple would definitely go to Microsoft to get payment for pushing traffic to their MSN network instead.

Google's market share is slightly more than 3/4 of all search [0]. They have a strong majority of all searches, and they dominant some submarkets of search, but they are far from total market dominance.

https://www.netmarketshare.com/search-engine-market-share.as...

I feel like 3/4 is pretty much dominance. If Ford sold 3/4 of all cars purchased in America, I think you'd say they were dominating the automobile market.

It's a good position, but it's far from a monopoly most people treat it as.

Google's market share is somewhere between 88% and 98% almost everywhere outside of China and Russia. These are pretty significant "submarkets".

http://gs.statcounter.com/search-engine-market-share

But I think what these statistics do not reflect is the growing share of Amazon in product search.

I think Apple has the power to establish a competitor - After all most searches are simple and DuckDuckGo well satisfies those. I stil seek out Google every once in a while, but how many users will go through the trouble to change the default, especially when you have !g?.

My next question is even if they do lose on search, with all their very successful "side" businesses, how much would it impact them at this point?

Google is actually pretty well optimized for the simplest, most mindless searches. It sucks for anything complex, though - Bing/DDG is a lot better there.

I think mindless and complex might not be the right words to use here.

I find google searching to be similar to writing. If I distill the question down to the crucial elements and use clear english, I get great results. If I throw all the elements of my question in and hope for the best, I usually am disappointed.

> My next question is even if they do lose on search, with all their very successful "side" businesses, how much would it impact them at this point?

Are you talking about Apple or Google?

If Apple launches a search engine that fails it'll have huge brand image implications. Their brand is their most valuable asset.

If Google Search were to fail then Google would lose the majority of their revenue. Sure, they could continue, but they probably would not be considered part of the Big Four anymore.

Apple already has a search engine.

You will see Siri Suggested websites coming up before Google’s results.

If they could not receive any kind of payment or kickback from any company I would give it a 70% chance they pick Google. As it stands, Apple knows that it can charge Google and Google knows its worth paying so they stay in the mutually beneficial relationship.

That is about 7% of google’s 2018 revenue! It is 30% of google’s net operating income!!

I looked it up: "Cost of revenues was $59.5 billion, consisting of [traffic acquisition cost] TAC of $26.7 billion and other cost of revenues of $32.8 billion. Our TAC as a percentage of advertising revenues was 23%." So yeah, you have to spend money to make money. https://www.sec.gov/Archives/edgar/data/1652044/000165204419...

Apple is sure concerned about privacy of their users until the Google dump truck full of cash arrives. Apple isn't the one tracking you everywhere but they're happy to sell access (to you) to someone who does!

Wait a minute. Google is the market leader in search. Apple offers/highlights DDG, Bing and other engines, but many folks want Google.

Agree, most users (excluding developers/power users), still default to Google. The default search engine can also quickly be changed if you wish.

> The default search engine can also quickly be changed if you wish

Then why is it worth $9.4 billion?

Clearly people want Google, Facebook and Amazon despite the potential for harm. But Apple champions your privacy, and these companies do not. Hence, the ethical conundrum.

We should remember this, the next time Cook or anyone from Apple makes public statements about privacy. I would very much like to hear a journalist ask these tough questions (my apologies of someone already has).

Apple is essentially handing these customers to Google and they know it - otherwise they wouldn't be able to ask for so much money in return.

It can be changed to another search engine without even opening Safari.

The point is they are selling out your privacy for money. A lot of it.

Does the same standard not apply to companies like Mozilla?

Yes.

You can change your settings easily. No need for such dramatic statements.

You can but a huge percentage won't or know how or won't bother assuming it is privacy safe because apple added it.

There is nothing wrong with google but at least go through ddg with a hashbang.

Most people will never change their default search. This is why Google's dominance mostly started with pushing Google Toolbar installs which changed your default in IE for you, and later, of course, with it's push into Chrome and Android and paying Apple to be default there.

If Chrome switched it's default search to DDG (no, this is not a plausible scenario), most people would be using DDG for search in a week.

The concept of owning demand is explored really well in this blog post[1]. A good excerpt:

> In short, if somebody successfully inserts themselves between you and your customer, they can exercise tremendous control over you, including taking a big chunk of your profits or outright killing you.

[1] https://florentcrivello.com/index.php/2018/10/22/own-the-dem...

I would love to know how google determines the value of being the default search engine... estimating it is required to agree to the fee structure.

interesting, that is the price to stop apple create its own search engine.

There's absolute no way they can do, the search engine is very very expensive to operate, to be successful you have to be better than Google and that require none existing technologies (such quantum storage).

edit: Google is not doing the best at searching, they are doing the best by budget current economy allows, to be better than Google you have to cut cost of operation in very dramatic way, so you can expand the beyond where Google stands now, other than that, you can't outperform Google.

I suppose that depends on how you finance it. For Apple, it could be a feature of their ecosystem; for Google, the search engine is just there to lure you in so they can show you ads. That would be a totally different story: does Google actually have incentive to provide you with the best organic results next to which the ads would look out of place and bad?

I don't think it would be a good business decision for Apple though, and there's no guarantee that they could even get there with throwing billions of dollars at it.

> to be successful you have to be better than Google and that require none existing technologies (such quantum storage).

Sorry, what? Can you clarify?

yep, some mad scientists are trying to create storage device with huge space, trying with biological and quantum means, the promise is to store all of internet information in a single device

if that happen, it would be possible to INDEX all of internet at very low cost and being competitive with Google. just think about how much it cost Google or BING to index 1 billion static pages.

>>There's absolute no way they can do, the search engine is very very expensive to operate, to be successful you have to be better than Google and that require none existing technologies (such quantum storage).

There's absolute no way they can do, Maps is very very expensive to operate, to be successful you have to be better than Google and that require none existing technologies (such quantum storage).

To get serious for a second, here's an amazing article on how far Google Maps is ahead: https://www.justinobeirne.com/google-maps-moat/

It is very hard to catch up with them.

OK, but the term "good enough" exists for a reason. How many users did Apple lose by not using G Maps?

So, Apple would need a "good enough" search engine and they'd buy DDG over a cup of coffee. Invest in improving it. And, yes, they're for sale, just as Microsoft or Exxon is (for the right amount of money)

Yet people use Apple Maps because they like the UX and it fulfills 90% of their mapping needs.

And also because every iPhone has it pre-installed. The game would be different if it was an optional download

I, for one, welcome our quantum word salad overlords.

Don't be rude to non-skilled English speakers. The comment is wrong but not because of its poor English.

interesting, that is the price to stop apple create its own search engine.

Launching, perhaps. Creating? No one knows.

Maybe one day when Google decides it doesn't need Apple anymore, Tim Cook will pull a "One more thing..." at WWDC.

In Apple's reporting where they don't have the breakdown in iPhone sales any more there is talk of revenue from other services going up. Maybe this is part of that success story.

Meanwhile DuckDuckGo (probably valued at under $50 million) is worth less than 1% of that fee. No wonder Google continues to retain a monopolistic market share.

Well, Google isn't the one putting it up for sale.

Apple could easily add a user choice prompt, where users can pick from the top 3 search engines in a country.

But I guess they like that $10B very much.

Apple could easily add a user choice prompt, where users can pick from the top 3 search engines in a country

Settings > Safari > Search Engine

Sure, this changes Safari's default search engine. Siri will still return Google results.

Ask Siri "Do a web search for {search query}" and you'll see google'logo at the bottom of the list.

That's not what I meant.

If Apple didn't want to push a search engine and take financial advantage of it, it could show a prompt the first time the user opens the browser, asking the user to select the search engine from a list.

But I guess Apple just loves that nice shiny pile of cash too much to give it up!

But I guess Apple just loves that nice shiny pile of cash too much to give it up!

Or perhaps a company that is focused on the user experience decided not to make 98% of its users change the setting.

Yeah, and charged $10B for it.

Right...

That seems like a really low estimate but I have no clue what DDG is currently valued at. They raised $10 million recently but after a little search I wasn't able to see at what valuation they raised the money at.

Me neither. I just guessed that it was a 20-30% stake, hence under $50m.

DuckDuckGo is basically a reskin of Bing search (unless you search in Russian, then it's Yandex). Their value-add is minimal, even if you trust them to respect privacy, despite not being open-sourced or audited.

DDG isn't a search engine in the same way Bing and Google are.

They must negotiate very well because as an iOS user I would be disappointed to not have Google as default (like when Firefox switched to Bing).

I thought Firefox switched to Yahoo

Yahoo is just Bing wearing different clothes.

It would be hard to imagine actually be disappointed that my preferred service is an option, but not the default. I use few of the defaults on my phone.

Quite a cost to pay for a generation of people that don't know how to set a default search engine.

This is the biggest benefit of Apple users.

I'd like to see a citation that Apple users are more likely to not change settings than average users.

Most people don't enjoy configuring systems and leave most of the defaults most of the time.

The most obvious and not controversial- Home screen on the iphone vs a home screen on Android.

Interesting. That’s like more than the entire yearly revenue of Bing.

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