Apple, Google and a Deal That Controls the Internet
nytimes.com
nytimes.com
> Nearly half of Google’s search traffic now comes from Apple devices, according to the Justice Department
> The Justice Department, which is asking for a court injunction preventing Google from entering into deals like the one it made with Apple, argues that the arrangement has unfairly helped make Google, which handles 92 percent of the world’s internet searches, the center of consumers’ online lives.
What? Worldwide, iOS market share is peanuts compared to Android. Depending on the report, the exact amount varies pretty widely, but nothing ever seems to report more than 18-ish percent worldwide. macOS is negligible. Meanwhile, Android’s market share is enormous.
Android devices alone—worldwide—could easily account for half of Google’s search traffic, especially when you consider countries like India. But the DOJ wants to argue that:
1. Google handles 92% of global search traffic
2. Half of Google’s traffic comes from Apple devices
If we believe that 92% figure, that places a generous upper limit of Google’s search traffic originating from Apple devices at about 20%, far short of “nearly half.”
Look, I hate the monopolistic nature of search just as much as the next person, but can we please double-check that our numbers actually make sense?
The DOJ legislates largely based on US figures, but noting Google's global power is hard to ignore completely.
IOS devices are more expensive, so the ones I have actually get used (and most were bought secondhand so don’t contribute to market sales figures). Our household usage and search share is surely 99+% from Apple OSes, while the device share of devices bought new at retail might be only 40% Apple.
1.) Google handles 92% of global search traffic
2.) extrapolate to the US (since it's likely the same, if not higher) : Google handles 92% of US search traffic
3.) Half of Google's US traffic comes from Apple devices (since Apple controls 60% of the smartphone market in the US).
iOS really dominates — I’d guess that half of the Android users get pushed by a salesman at a carrier store, who get spiffed by different companies. Many only buy a smartphone because they are unaware flip phones still exist!
“In the United States, Apple iOS devices — those running on Apple’s proprietary mobile operating system account for roughly 60 percent of mobile-device usage. Apple’s is a closed ecosystem; Apple does not license iOS to third-party mobile device manufacturers.
Another roughly 40 percent of mobile-device usage comes from devices that use Android, an open-source mobile operating system controlled by Google. Unlike iOS, Android is licensable, which means third-party mobile device manufacturers can use it as the operating system for their devices. All other mobile operating systems, combined account for less than one percent of mobile device usage in the United States.”
(Of course, whether that’s correct is a different question from whether that’s what the DoJ claims, but it doesn’t seem farfetched to me that it is correct, too)
https://gs.statcounter.com/os-market-share/mobile-tablet/uni...
Mobile and Mobile/Tablet are pretty much the same, and Tablet only giving Apple a few percentage points advantage further (~65%).
I'd assume it's referring to both only US traffic and only mobile traffic.
Because if you make it worldwide or include desktops/laptops, it's laughable.
[1] https://gs.statcounter.com/os-market-share/desktop/united-st...
I do see everyone running with those numbers as if they were fact though. That's the danger of using such made up numbers in the report: everyone else repeats them as if they were fact even when the report says they don't know.
No. That's NOT what the DOJ wants to argue. Yes, the complaint itself does refer to market share, but it doesn't specifically refer to "92 percent of the world's internet searches". In fact, the complaint refers to market share within the United States, since that's geographically relevant to the case. What happens elsewhere isn't. [1]
[1] https://s.wsj.net/public/resources/documents/GOOGLEANTITRUST...
This is what the NYTimes wrote:
> The Justice Department, which is asking for a court injunction preventing Google from entering into deals like the one it made with Apple, argues that the arrangement has unfairly helped make Google, which handles 92 percent of the world’s internet searches, the center of consumers’ online lives.
92 percent links to a report by statcounter.com [2]. That's the NYTimes making a claim about Google's market share and linking to a source.
If you read the sentence even more carefully, you'll see the word "which" appear twice. "Which" grammatically denotes a non-defining clause from the perspective of the writer. It's information that you could remove without altering the core of the sentence: [3]
"The Justice Department argues that the arrangement has unfairly helped make Google the center of consumers’ online lives"
More importantly, "which" is gramatically used from the perspective of the writer to give a bit of non-essential background to the sentence. And so, what is absolutely NOT being said here, is that the DOJ claims that Google holds a 92 percent market share.
[2] https://www.nytimes.com/2020/10/25/technology/apple-google-s... [3] https://www.grammarly.com/blog/which-vs-that/
Is it harder to read with two non-defining clauses? That's something else.
>Over the years, Google has steadily increased its dominant position in general search services. In July 2007, Google estimated its general search services market share at 68 percent. By June 2013, Google estimated that its share in the United States had already increased to 77 percent on computers. By April 2018, Google estimated that its share was 79 percent on computers and 93.5 percent on mobile. More recently, Google has accounted for almost 90 percent of all general search engine queries in the United States, and almost 95 percent of queries on mobile devices. Recent share estimates are in Figures 7 and 8.
[1] https://www.statista.com/statistics/266572/market-share-held...
Quoting:
> Apple iOS continues to hold its large share of the smartphone operating systems’ market within the United States, claiming more than half of the market in May 2020.
> ...
> Android still the one to catch
> Android, however, still holds the largest share of the United States smartphone operating systems’ market and has done for many year.
So this is about the smartphone operating systems, in the united states. Apple has “more than half of the market”, and Android has “the largest share”. How are both statements possibly true?
Market share /= number of devices.
Apple owns the "market", ie the money. Apple owners spend vastly more on their OS (via playstore). Android might be running on vastly more devices, but the people who matter, the rich people with money to spend on camera apps, spend that money via iPhones.
We live in a world where whales matter more than customers. The legions of android users who use their phones to make phonecalls, as internet browsers, and as navigational tools ... they don't matter as much as any single iPhone user who regularly drops a few hundred every month on eye candy iPhone backgrounds.
Android users made a choice to prioritize their smartphone less in their financial lives by getting a cheaper device (except for the 5-6 HN commenters who got an Android because of a personal vendetta against the Apple App Store policies).
It stands to reason that the people who decided not to spend money on a smartphone also decide not to spend money on smartphone apps.
A nerd get an Android, where a teenager will get an iPhone. It's simply a low information consumer buying an overpriced product.
Sorry to burst your bubble of pretention but the highest end android phones are in another league of price and have been for a long time.
To be fair I won't even bother comparing the Zflip2 foldable because it's more of a proof of concept than something many people buy but it's price tag would make you blush. So, the numbers: the latest and greatest iPhone 12 max is $1549 CAD while Samsung's Note 20 Ultra 512GB is $2029.99 CAD.
If someone is willing to overpay for an inferior product, they likely will also impulse buy more often than someone who shops and researches phones..
[1] https://www.patentlyapple.com/patently-apple/2020/01/in-2019...
Be careful what you ask for. If you make such deals illegal, Apple will have to set Google as search engine for FREE thus benefiting Google.
As a non-murican it baffles me that US government will try to hurt its own successful companies in this fashion which smells of incompetence and political vendetta rather than genuine concern for the health of search ecosystem.
The interesting question then would be whether Apple would take somebody else's money and change the default search engine on their devices. Which might net them almost as much money, but might also irritate a lot of their users if the highest bidder isn't as good of a search engine.
The justice department doesn't care who handles search traffic in Cambodia, Canada, or Taiwan. They are only interested in US based search traffic where iOS has 50%+ market share.
Who had Apple down on their betting sheet as the biggest loser from a Google anti-trust lawsuit?
It’s on par or better for 99% of what I use it for (tech, real estate, and advocacy).
DDG won't even return Stack ("Your question has been deleted as a duplicate") Overflow results for technical questions.
For any other search term, Google generally spams me with "answer boxes" that are universally slightly besides the point, while DDG gives me a clean page of relevant links.
Barring C-level change at Google I’m expecting the gap to disappear in a year or two.
My impression is that Google Search is worse now than it was in the past. They've gotten complacent. So if they had to fight for users instead of taking them for granted through paying off Apple and Mozilla, then maybe Google would have to perform better. Everyone wins? (Except AAPL stockholders.)
If you Google '$PRODUCT review' and only get Amazon-affiliate scam sites pretending to be review sites, it's not because Google has been SEOed but rather because there are no actual reviews of $PRODUCT.
Aside from a botched update last year, where Google would only return results that were selling things, Google Search is still very good at finding information that exists.
When looking at a web page you nowadays have to wonder 'what is the purpose of this page?'. Unfortunately even sites like wirecutter exist more and more to drive revenue, rather than inform the user. The only types of pages where purpose is still non-commercial (in most cases) are discussions.
It is the pointer to monopolistic behavior: Being so influent that nothing exists outside the Google Search. We can’t affirm honest reviews don’t exist: I’m sure there are authentic comparators, in fact in France UFC Que Choisir is a pretty leftist comparison organization who explores products, compares them and even regularly sends companies to trial, a pretty good sign that they couldn’t care less for those companies in a way that is awesomely aligned with authenticity. I’m sure there are millions of other people writing reviews for pleasure.
Google chose not to show them, and to orient their search in the way they wanted, whatever it is, maybe they’re showing corporate sites first, or commercial sites first, making it impossible for amateurs to exist, making them « don’t exist ». It turns out it makes you feel like nothing is authentic. Therefore we turn back to Amazon or Google and buy any of the list, just trusting the biggest vendor. This probably innocuous wording of yours may be the key to the whole problem here.
Google and DDG, however, are very good at finding authentic reviews in niche market segments where authentic reviews are still common. The fact that search engines can find these reviews suggests that the lack of authentic reviews for mainstream products is much more due to a lack of authentic reviews on the web rather than a problem with search engines.
Whenever I use DDG, I just have to remember that DDG does not have my personal profile, and adjust accordingly. Then the results are fine, and even better if I'm searching outside my normal profile.
It is. I haven't accepted cookies from google in many years, and when I get frustrated enough to !g bang on ddg it never finds me anything better.
It's not 2000 anymore. Building a web scale search engine no longer requires novel distributed systems work, and the most viable search algorithms have strong open source implementations. It's still a very hard problem to get right, but you can create an "interesting" poc in a few weeks. Recent work on unspervised content based recommenders can help reduce click stream data requirements.
App Store search says.
That said, in general, I appreciate the greater average quality of apps in the App Store.
What's an open source ripoff?
Even indexing the web is a different problem now than in 2000, users expect the search results that are SEO optimized for google.
I use Google with site:apple.com to search all of these instead.
If Apple search capabilities are a hidden asset, then they're very well hidden.
On the other hand, there are often various good local search providers who have bangs that you can use directly, with better SERPs than Google for the relevant queries.
Even with those features on I find constantly outdated information these days.
Yup that article from 2012 Techcrunch with the broken links is really helping me Google.
Disclosure: Currently running an alternative search engine. However I legitimately don't like Google search or Google's practices in the search market, so much so it actually prompted us to throw our hat in the ring.
Edit: I just made the search again, "Techcrunch submission form" The first result for me is from 2006, not 2012, https://techcrunch.com/2006/02/01/how-to-submit-your-company...
Yeah, Google has overtly for, IIRC, about a decade said they are focussing search improvements on personal and even predictive search, so, sure, disable that and the quality goes down.
But that just illustrates that, while there is an obvious advertising incentive for data collection, it actually is relevant to delivering useful search results.
[0]Only 22% of consumers say they are okay with having their information collected indiscriminately by websites to provide a better experience.
Which means by that metric google abuses 88% of it's users unless they go through the means to turn the features off.
Informed consent, access and ownership are all pillars a modern site experience should have when it comes to data collection -- Google fails here and so does DDG in the opposite direction by just never asking which means they can't do any personalization.
The winner here is going to be someone who can provide the better ethical and functional experience. I firmly believe in the next 15 years we will see litigation in the US around data privacy just using California as the canary and Europe recently voted to get even stricter than the GDPR.
That isn't a quote from the referenced link. The quote is "Only 22 percent of consumers agreed that they would be willing to hand over personal data to improve experiences." - which is quite a different thing.
I'm not happy to hand over personal data to improve experiences. But I'm very happy for Google to track what searches I do to improve their results.
Your right it's not a quote I didn't quote it, notice the lack of quotes. I'm also not sure how you are splitting hairs over "information collected indiscriminately" which would be a superset including personal data.
I get https://techcrunch.com/2019/11/20/submit-a-guest-post-to-ext... as the first link
Absolutely. I switched from Google to DDG and Qwant a few weeks ago and was surprised that I didn't see much differences.
But after discussing it with colleagues that were switching back to Google it became apparent that it was because I was siloing Google to its own browser, erasing cookies etc that made it as "inefficient" as the other search engines.
Either way, I use Searx[1], which is a search engine aggregator that you can self-host or use one of the public instances[2].
I would be unsurprised if it's true. The reality that DDG is going to have is that search is almost inherently personal, as an artifact of the imprecision of language and the lack of surrounding context. It applies to some searches more than others, but something like "what is vanilla?" Has a whole variety of answers. What is the substance vanilla? What is made out of vanilla? There's probably 80 different software frameworks that use vanilla in the name. Who knows how many companies have vanilla in their name. Oh, or it could be that you mistyped Manilla, which has its own set of results.
Personalization let's you cut down on that. Maybe this person searches for Python stuff a lot, so there's a good chance the frameworks are what they're looking for. Or, the inverse, this person looks up recipes all the time, they probably know what vanilla is so don't show a full page of "this is where vanilla comes from" results.
Lacking that context, they have to assume the same context for everyone, so either everybody gets a full page of web frameworks or everyone gets a full page of frameworks; DDG has no way to tell which you're probably more interested in.
Yeah, if you aren't used enough, it's not worth trying to target you for manipulation. All that really demonstrates is (1) they use different algorithms than Google, so optimizing against Google's algorithm doesn't work on them, and (2) they aren't used enough to be worth gaming separately.
I'm sure there's some site the obfuscates results and could probably answer the question a little more scientifically.
My process: think of something I want to find, think of all the keywords I can, type them into the search engine.
Google helps me find what I'm looking for faster than Bing or DDG.
In my anecdotal experience, it's every bit as good as google, and I simply did not notice a difference in the results when I switched.
It must be down to what people search for, or maybe how heavily Google has customized their personal results to fit their behaviors. I mostly use web searches for looking up technical documentation, and 5-second tasks like weather forecasts and unit conversions.
This has happened probably a handful of times but enough times that I would have been stuck in the water without Google, unfortunately. Only one of those handful of cases was significant (I needed that information for work, not a simple curious search) but Google saved the day.
Some of it may be due to years of growing accustomed to building searches subconsciously around Google which is unfair to DDG, but it's hard to say definitively.
Disclaimer: I switched to DDG and only very infrequently need to resort to google. I happier not being tracked.
If you are searching technical info like pdf manuals, datasheets, etc.. I find DDG works better than Google, because most companies aren’t buying to be first result, so the manuals show up first.
If you are looking for Stack Overflow type of content “how to config X on linux using Y”. The !g flag becomes handy.
This is what I do as well but regarding results on technical info I consider DDG/BING/Whatever way inferior to Google.
"kicad convert wxpoint to millimeters"
Note how many "Autocad" entries clutter the DDG results. Google gets kicad in every single entry on the first page.
My biggest frustration with search engines is "I gave you the terms so USE THEM. Don't be helpful and omit terms you think aren't relevant."
I still miss AltaVista's interactive cluster diagrams where you could see the web of links and pick the relevant one.
If DDG simply implemented that single feature, I would never go back to Google.
The problem is that, like Microsoft in the 90's, Google will simply copy your feature if it takes off. So, there is no point in innovating in a visible way in search. That's the problem with a monopoly.
Here you go. #2 on the list.
https://www.runnaroo.com/blog/the-search-engine-hacker-news-...
Thanks for this. I'll flip it to my default search for a while and see how it goes.
I know Swisscows and Carrot2 both do some topic clustering, maybe those would be interesting as well.
1. Index size - Google spider visits more places than Bing spider. This is why Google delivers better results for compiler error strings, serial numbers etc.
Query examples where Bing/DDG completely miss the mark:
SA1DP2CF - a serial number
s2 034 253 033 C - audi rs2 exhaust manifold part no
Denninger Str. 96, 81925 München, Germany - what is on this location?
2. Intent/Semantic
Query examples:
tesla 00001 - who owns first tesla? Bing is completely lost
original elite alien name - looking for thargoids, Google tells me that right away, DDG #8
3. Localized
Query example: hiking trails - Google gives me relevant local results based on my location (IP based), DDG doesn't (although it is aware of my IP-based location in the same way)
Getting these right is incredibly hard as you literally need Google size infrastructure to get this right, which even Bing doesn't have.
Second thing that is hard to catch up for any Google competitor is the rest of Google infrastructure users rely on - Browser, Email, Meet, Docs, Youtube, Android, Drive... Even if you get the search right but the user has to go back to Google for the rest of services, Google has a chance to get the user back.
IMO attacking Google starts with developing a product that does not insult user's intelligence, is innovative and does things Google can't, explores different business models (as ads inevitably lead to conflict of interest - optimize for user experience or advertising revenue?) and offers infrastructure that displaces (at least some) Google services.
You and me, as consumers, shouldn’t be forced to use a worse product just to try to balance the market, because we can’t compete with Google either. That’s the point of anti-trust regulations.
A competitor who wasn’t shackled to that business model would have a lot of freedom to innovate.
Most people seem to disagree with you about the raw results improving. They certainly don’t seem to be for me.
First 4-5 links are ads, the next might be relevant. Page 2 onwards is definitely irrelevant.
Wouldn't it be ironic if the DOJ case fell apart because Apple released it's own search engine?
A decent search engine is not worth the massive amount of 12 billion dollars. The advertising platform Google build is!
Apple 1) can't recreate that 2) it shouldn't as advertising is not in their DNA and opposite of their privacy core values.
Apple can build a search engine (or just switch to Bing) but they wouldn't be able monetize that for $12000000000.
They certainly have been hiring people who know how to build search tech.
>Apple has hired Google’s chief of search and artificial intelligence, John Giannandrea
https://www.nytimes.com/2018/04/03/business/apple-hires-goog...
This is true, but not in a way you think. Conventional wisdom tells us that you're gonna need completely different approaches across the stack (not just technological but organizational as well) when a problem size grows 10x, and the web has grown about 100x from 2000.
Anyone doing a gpt-3 search mashup?
There is probably going to be another search player willing to pay to be the default on Apple, with the increase of usage, due to being the default, they will make more money, with more money they will be able to improve their service faster.
Unless search quality is critical for Apple, which would be surprising seeing the search quality of Siri
changing "just the default" on organ donation to presumed consent w/ family veto, for instance, would essentially end all organ supply issues in the nation.
You can't simultaneously argue that being the default is irrelevant and that it's bad to pay to be the default.
But yeah, I'm sure we all know more about Google's strategic outlook than high-level Google execs.
I've been using DDG since they first launched, and that simple promise was all it took to get me to try them out the first time I heard of them.
No matter what your opinion of the company, Google's brand reputation is well earned and pervasive, and it started and was built from scratch, as opposed to DDG which basically stuck its own logo on Bing's API.
You will do that the vast majority of people wont, for them Google means search.
If Google is compelled to stop making search deals, Mozilla loses 90% of their income. They just laid off tons of staff. How many more will they be forced to cut?
Apple I suspect will be just fine. But this isn't good news at all on the browser monoculture front.
It's also possible Microsoft would exercise caution, considering this suit against Google. They may want to sidestep any deals that could paint a target on their back in the future.
Also Google is not the best engine everywhere nor for everyone.
I think a sign of this is if it was that simple Google wouldn’t be paying that much in the first place.
Also Apple could build its own search engine (using either google or bing as an api) or they could say buy DDG.
If the Justice Department contines with this attempt to stop Google paying to be the default, I can easily see this ending in a situation where their non-search competitors are worse off financially and consumers have substantially less choice than they do now.
Funny fact: check out the mobile version of bing.com. The MS logo is hidden from the viewport unless you scroll up. Almost as if MS is pretty ok with not advertising to people too much that they’re on their platform.
I have family members who I'd call "computer literate 101" (i.e. they can use e-mail, create a PowerPoint, buy something on the web). Their homescreen is a history of their apps downloads, everything just gets added to the next available space. They do not use folders, they do not move icons. They do not enable large text size even though it would help them see the text better. They do not change the default ringtone. They do not use "do not disturb" when they're in a restaurant.
The reason is, they don't even know these options exist. They have never opened the Settings app.
To change the default search engine, you need to go three screens deep in Settings.app.
If Google stops paying Apple and Apple changes the default (for new users) to Bing or whatever, 99.5% of new users will just use Bing.
I used a distro that made yahoo default in Firefox. It’s fine. I’ll end up switching to google eventually but haven’t been arsed to do it yet.
Clearly there are technology challenges (internet scale web crawler, indexer, search interface, ad technology) but these are not novel challenges anymore.
Funding is an issue as operating a general search index is likely very expensive with high upfront investment. Marginal costs are nearly zero as the major expense is likely fixed (crawling and indexing the internet) while variable costs are a small percentage (serving search results for each request).
Google, like Nike, Gucci, and Procter & Gamble, has spent billions to build their brand perception and cement the habit of using their products despite there often being minimal actual differences between competitive products.
But the critical one really does seem to be attracting new users. The history of DDG, ClickZ, Bing all seem to validate this. Just getting a user to _try_ a new search engine is very difficult despite it being "one click away." Certainly a deal with a browser maker / mobile manufacturer would aid this but it's priced amazingly out of the reach of competitors denying perhaps the most obvious way to get trials and traffic.
Google clearly knows this. How can it be true that switching is so easy ("just a click away") as to suggest that being the default is meaningless, and yet pay >$8 billion a year to be that default.
Without that everything else is pretty much useless (which is why DDG primarily republishes Bing results).
You're right that drawing users is a big challenge, but privacy gives you a way in there (again DDG). It just isn't enough if you can't provide better results.
Google works hard to maintain their dominance on a lot of fronts, some questionable and in need of regulation, but the biggest reason for their position is, as it always was, ranking algos.
Which is extremely expensive in engineering time because ranking isn't static but rather a constant war with gaming.
I purposely didn't want to go down the "quality" rat hole because that tends to devolve into subjective opinions (see DDG threads throughout HN). My personal, subjective opinion is that blind tests would likely reveal very little differences and thus justify their major investment in brand advertising made by Google.
(not blind but compare https://duckduckgo.com/?q=best+wallpaper with https://www.google.com/search?q=best+wallpaper; do you really want 3 pinterest results to this query; this is the burden of being the dominant search engine - you're the one people will game)
--edited for typos
Let's compare the last search I actually did on Google:
https://duckduckgo.com/?q=how+to+partition+a+plane+into+k-ma... https://www.google.com/search?q=how+to+partition+a+plane+int...
DDG results aren't "bad" as such but they're not as good as the Google results. The three videos that DDG gives me at the top of the SERP are totally irrelevant and the Wikipedia panel DDG offers is while not completely unrelated still doesn't address my query.
The google results contain no irrelevant videos, no knowledge panel, just ten research papers. Much better results.
In order to be a sustainable google competitor, you need to be a competing search business, not just a competing search engine. The business model is such that market share affects unit value. A search business with 1% of google's traffic (or 1% of fb's social traffic) does not make 1% os google's revenue. More scale, more unit value.
Meanwhile, the way most/many small search engines monetize is via adwords. Adwords has already been found guilty (EU court) of abusing this nasty grip on their (minimal) competition's revenue avenue.
Bing invested billions of dollar into search. They had traditional advertising including celebrity endorsements. They were unable to compete with Google on quality.
Google has large team of engineers working on search quality and they evaluate each change using human raters.
I've seen this repeatedly brought into question in recent years and I've also observed it myself. Google's search quality is suffering horribly and it seems at least partly related to them moving away from the PageRank-like algorithms that made it famous (or, more reasonably, including many new additional components to it which are unrelated to PageRank and which are drowning out the signal).
They had to evolve PageRank (into things like hubs and authorities, etc..) to maintain quality.
If you think their results are bad, try a rudimentary search query on the raw data from one of the open web index projects.
Google sucks in a lot of ways but they're still really really good at search.
There are some limited solutions. If they allow to filter out pages full of tracking and ads, it will filter out lot of shit content, but that probably harms their business model. They might have allowed to exclude some sites from search, too..
Google spends billions to secure its position, which makes it virtually impossible for new companies to enter the market.
That said I often use incognito mode for Google searches and it's still quite good.
"Google uses the information shared by sites and apps to deliver our services, maintain and improve them, develop new services, measure the effectiveness of advertising, protect against fraud and abuse, and personalize content and ads you see on Google and on our partners’ sites and apps. See our Privacy Policy to learn more about how we process data for each of these purposes and our Advertising page for more about Google ads, how your information is used in the context of advertising, and how long Google stores this information."
When stuff gets paradoxicalish, it can be because the paradigm/model is wrong.
In this case, the model is the economic-legal model formulating monopoly theories and antitrust legislation. They were thinking mostly in terms of factories. Thinking of "barriers to entry" in terms of fixed/marginal costs makes a different kind of sense for factories.
You can't pay an $nbn "fixed cost" price to "build a fb." That's like the old outsourcing joke/prank: Job: Build me an app that makes $1m. Will pay $10k. It also isn't factory unit economics that determines success for a Google, FB or many other modern mega-businesses. Owning 1% of fb's social media traffic does not yield 1% of fb or adwords' revenue. It's more of a "rewards to scale" than an "economies of scale" thing. Revenue goes up. Unit cost may go down, but that's besides the point for fb or adwords ad revenues. The scale itself matters, not the savings it generates.
TLDR: trying to examine google's anatomy using a model based on Bell or Ford circa 1929 will result in confusing questions.
Meanwhile, monopolies have a logic of their own. They're valuable, and therefore worth paying to have. That's how deals like this should be viewed, imo. It's strong circumstantial evidence of monopoly. The deal, in itself, shouldn't be the object of objection.
You clearly underestimate the complexity of turning 4 keywords into 3 links that answer these keywords. This is so hard that even Google is not very good at it. But Google is way better than the competition.
Only the crawler infrastructure you need to populate your index requires several thousands of dollars of server per month, that's a lot for a company without founding. Then you need to remove spam, you need to understands each document that you crawl, you need to rank them, ...
A simple exercise that you can do is to just do a search for your personal knowledge base, you will see that it is much harder that you thought
Is the question whether this deal prevents companies from developing and selling their search solution? If so, then is Google paying Apple, who has what, 40% market share of mobile phones, really able to stifle the development of search engines? With search on mobile phones being a further x% fraction of all (general, browser-opening) search being done on the internet? I.e. when placed with desktop, tablet, browser window search as well.
If we're down to perhaps low double digit % of all search, how it that unfairly preventing competition?
And yes, if you then go to the opposite extreme and say that the market is search on Safari on iPhones, then the market is cornered and controlled by Google. But is that reasonable to define as the market in question? Where you're entitled to not have anti-competitive behavior? That's Peter Thiel's example of having cornered the market for British food in downtown Palo Alto and prevented competitors from moving into your rented space.
It may be a sweetheart deal for Apple, and Google making sure that it gets preferred treatment in this one corner of the internet, but it seems to me hard to claim that this has stifled competition for the development of search engines in general?
Isn't the other 60% basically just (Google's) Android?
And I think these days, search engines aren't just developed by someone coding up a clever algorithm in their garage; they improve based on data from being used a lot. So yes, it would be an obstacle to competitors.
> And I think these days, search engines aren't just developed by someone coding up a clever algorithm in their garage; they improve based on data from being used a lot. So yes, it would be an obstacle to competitors.
Wait, now we need to make sure others can develop a good search engine? That's what fairness in competition is?
That's a whole new level of argument. I cannot imagine a court wanting to step into that territory.
I just think it's a whole other level of argument to say that someone not having access to the same data and only being able to develop an inferior search technology = anticompetitive. (where the "not having as good data" part is not done by denying other competitors access to some resource that they should have a right to, or could equally gather on their own)
A monopoly does not mean literally zero competition; it need only mean no competitors that are good enough to be viable.
Not only does a Google or Intel or whoever need to not artificially prevent competition, it has to ensure that its competitors offer actually good alternatives? How can you put a responsibility on a party for the capabilities of someone else?
Definitionally, companies without viable competitors are monopolies. Microsoft still has a defacto monopoly on PC operating systems as Linux isn't a viable choice for 95%+ of PC users. This market situation is extremely detrimental to consumers but isn't illegal.
Linux has many more features than Windows, gives the user more control, respects privacy better, and is free even, yet consumers choose not to use it.
How far must a company or government go to create competition where the behavior of both the suppliers and consumers indicate otherwise?
$260 Billion in revenue in 2019, so that's ~4% of Apple's revenue.
There's no reason for this recurring payment to be compared against revenue when it's essentially pure-profit contribution that cost Apple close to 0 marginal cost to implement.
Apple spent a lot and continues to spend a lot to retain its enormous share of wealthy users, which is why Google pays as much as it does to be default. Exactly how much to attribute is probably impossible to calculate, but certainly not close enough to zero to call it pure profit.
Profits are "Revenue - Recurring Costs - One-time-Costs". Since this decision costs them $0, why do you want to put costs into the denominator?
~4% == $10 Billion / Revenue
Or:
~20% == $10 Billion / (Revenue - RecurringCosts - OneTimeCosts).
Which number looks more correct to you? I guess it depends on how you use the number, but from my perspective, the lack of costs means that its more logical to compare it to Revenue as a whole.
Note: Operating Profit is "Revenue-RecurringCosts" (without one-time-costs associated). Operating Profit would be "more correct" if this were a hypothetical decision with recurring costs. (The one-time-costs would just muddle the discussion).
Apple made this deal with Google before the iPhone was even launched and arguably among the first revenue sources they ever had, and the revenue from it has risen as the value of that search bar has risen, along with their other revenue. It’s plausible to argue it’s enabled them to invest more in developing the phones and iOS, so without it their expenses might have been lower.
Another thing to consider is if Apple didn’t sell this deal to Google, they’d probably be making a deal with Microsoft to replace it with Bing, or Yandex in Russia, or whatever. It doesn’t only have value to Google, they might make less but still it would be a lot, so really the revenue that’s uniquely ‘Googly’ from an Apple perspective is just the delta of the extra they make from Google.
Because they don't have to pay (almost) any employees or server farms to make Google the default.
We have an exact counter example. When Mozilla was almost entirely dependent on Google search bar revenue would you say the same thing of them? By definition it’s all profit because it cost nothing to make Google the default ... except most of it went to pay operational costs because their other revenue was very small. Even supposing they then get more other revenue from other sources, you can’t suddenly say search bar revenue has switched from going here to going there. It doesn’t make any sense.
Also the Google revenue to Apple has scaled with devices sold, sell no devices make no Google money. Increase sales and you can demand more from google. It’s all predicated on making and selling devices, which takes people.
Totally the opposite. Capital projects are greenlit on profits. The profits Google delivers to Apple are a better argument against it building its own search engine than the revenues.
The house report says they don't know how much Google pays and they pulled the numbers from a story on the web that was guessing.
So as of right now no one knows what the revenue or profit is.
We know Mozilla's numbers for a similar type of deal from that era and now. We also how market share and absolute devices have trended from 2014 to now.
Apple' s dominance in mobile and mobile as platform having a larger impact on search then web.
Putting it altogether 8-12B is a fair estimate.
To see it another way, if google is ready to pay mozilla $500 M / year with a browser in single digit market share and predominant presence only in web, 20x to apple is pretty easy
I get that people don't like the surveillance tech business model, I don't really like it myself. But we can't just pretend that the personal data that they gather to serve you ads more effectively isn't also the reason their search results, at least in my experience, are better than their competitors'.
It is a solved problem for big tech , apple already has one with siri suggested site.
Just like maps. Apple one day decided google maps is no longer thr default and implemented their own. Sure they had bad early years and hilarious issues, however they are on par or comparable to google maps today.
The word "cartel" already exists.
If I were at Apple and I had payments like this coming in, I would absolutely take $1B/year off to fund building a search engine. This because Google can 'turn off' this at any moment, so having that be a non-threat would be useful. Further there is a tremendous amount of value in crawling the web in terms of data set generation. And finally it really would allow them to build knowledge bases that would enable Siri to be more effective as a verbal assistant.
But while the cash is pouring in like that? Well just ride that fountain of cash for as long as you can.
You could always switch to Bing, which isn't really that bad as a Google replacement.
In all seriousness though why would Google want to ever turn itself off for Apple devices? That would backfire horribly.
Google decided to ditch China by not cooperating with the government. Bing decided to cooperate and is happily unblocked there.
Think about the money that Apple has invested in their own bespoke ARM chips. They could have stuck with Broadcom or Samsung chips for the iPhone but they didn't. They wanted things that they couldn't get access to through a supplier, and a competitive advantage.
If I were an executive at Apple I would look at the risk every supplier contributed to overall profitability and margins. And I would look to see how much value I could capture for Apple vs paying it out to third parties.
So for me the question is about "How much of the user experience can I ensure will meet my standards?" and having your own search engine would help there. There are other values as well when you can make large scale semantic queries against the entire web. And it can be extremely lucrative to tie the "search experience" as a feeder into your other products (which is part of what the Justice department doesn't like about Google)
This is a hypothetical of the frog-with-wings variety.
That would be a good result but despite the title the rates are from 2018.
Google gives me bankrate.com in the #1 paid and the #1 organic position. This seems like a superior result.
In general I think it is hard to judge search quality from a query like this which is incredibly lucrative for search engines. There's an adversarial process between quality, SEO, and advertisers.
It just doesn’t using it to compete with Google head on currently.
I’m guessing that their strategy would be to continue to integrate search results across the os gradually, rather than building a straight up Google competitor.
Unless of course they are forced to.
I'd be surprised if one of the conditions for the lucrativeness of this payment is paying Apple to not compete in Google's bread & butter, which is why I don't see there's any risk that Google would stop paying for placement whilst iOS maintains its valuable user base.
If they do decide to pull the plug Apple can always acquire DDG and give themselves a head start to building a competitor.
If Google did decide to drop the payment they'd most definitely turn & collect placement checks from Bing as their first recourse, but if they wanted to build their own search technology they wouldn't be sourcing their results from Bing, they'd want to make sure they're masters of their own fate and own (or license) the technology & expertise themselves like they're doing with Apple Maps.
But I don't see any of this happening, the placement payments benefits both Companies.
Apple has half the phone business by revenue, not by number of phones, never mind by value delivered. But to advertisers, that is the number that matters.
Apple customers are extra-valuable to pitch to, because they have already demonstrated that (1) price doesn't matter to them (or they would have a different phone), (2) they are easily satisfied (or they would have a different phone), (3) they are readily manipulated (or they...), and (4) they are especially status-conscious (...).
All those qualities make them what business schools like to call "cash cows" (yes, really) that can be milked indefinitely. Apple is renting them out to Google at a high rate. Google knows that practically all iphone users would never change the search engine on their own initiative, because iphone users have been very carefully trained, over the years, to take exactly what Apple dishes out and learn to like it.
Apple knows that renting out their customers doesn't cost Apple direct income, because they have already spent on everything Apple has.
Knowing that somebody is an Apple user, you can offer them top-drawer prices and they will pay, provided a high-status logo is attached, and feel smug about having paid it. They are buying "price-signaling" mojo, so they don't demand commensurate value, and are cheap to cater to.
I’m an iPhone user and price matters to me. Status means little to me.
Privacy is my priority and number one reason I use an iPhone. Apple is not an advertising company, and doesn’t make a buck selling my data. FYI my mobile search default is DDG.
Not to mention iPhones have received software updates for far longer than anyone else for over a decade and they clearly have the lowest amortized costs.
Instead they (mean to) make a buck selling you to Google, who is and does.
Using DDG, and caring about price, puts you in the negligible 1% of iPhone users who fail to substantially reduce the value of Google's subscription investment.
I can support an advertising company rather than supporting a company that patents trivial features of programming languages and rounded corners of phones, not to mention deceptive advertising tactics.
Mozilla sells its users for only, what, $200M?, because they clearly are worth just that much less, to Google.
Prior to that UK attacked/colonized 9 out of 10 countries https://www.telegraph.co.uk/history/9653497/British-have-inv...
Imagine what Google is doing to millions of small businesses by slightly tweaking its algorithm every few months... That's the real damage. These are the real casualties.
We're taking the focus away from millions of casualties who experience real suffering and directing it towards a single company which is doing well anyway.
The pain of the actual 'little guy' is 100x what the CEO of DuckDuckGo feels. It's total and absolute hopelessness.
Businesses which benefit Google and Google insiders. That means big corporations which Google has long term advertising deals with, VC-backed startups which Google plans to acquire at a discount and other businesses which have a connection to Google insiders (startup of the project manager's friend, ...). I'm not suggesting that they tweak the algorithm to benefit specific websites (they probably don't), but they tweak it to favor certain characteristics which, on the whole, benefit Google and Google insiders. Don't forget that Google employees are not a representative sample of the population by any measure.
What kinds of businesses tend to lose?
Businesses that are not affiliated with Google or Google insiders. Independent projects.
The reason why people at Google don't acknowledge that this is happening is because the harm is literally being inflicted on those businesses which are in Google's blind spots so they don't even see the problems... Except on rare occasions when they are shocked to realize that 50% of the population voted for Trump.
This line makes it sound like Apple and Google have the same parent company. Should it read “Apple, and Google’s...”