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Comment by toni | Hacker News Reader

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!

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> 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.

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.

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.

Yes but those other entities aren't Apple.

Apple does the impossible. Frequently. If anyone could make a better Google it would be Apple.

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)?

That's the point of the discussion, how much of that opportunity cost is due to monopolistic behavior on the part of Google?

There would be an opportunity cost even without Google’s money. Google may not be what it once was but it is definitely still the best in the free-tier search engines you can use today and in 2007 it was several heads and shoulders above anything else Apple could have picked as the default on iPhones.

If payment from Google (or anyone else) isn’t a factor in what Apple uses as the Safari default, it is not at all clear that this change alone would make it worth Apple’s time to develop their own search engine. You have an easier argument with that change, but it’s not a slam dunk.

Have you seen Apple Maps?

Have you seen Apple Maps recently? It’s great. I switched over a few month ago.

OSM is still way way better than both.

When I walk in the mountains here I am walking in a big empty green square according to Google :S Same with Apple.

Meanwhile OSM knows every little trail including surface and gradients <3 It's amazing. And I can turn on layers so I only se the things I need and not everything else.

I'm not sure why you're downvoted, but OSM is actually better at nature areas.

And not just there, also when walking in the city. Little shortcuts are often not on Google maps at all. The only thing where I see Google beat it is live public transport information.

And perhaps traffic but I don't drive so I don't know how good that is.

Didn't they try this already with a _much_ easier problem ? How's apple maps doing these days ?

By most reports I'm hearing lately, it's doing quite well, better than Google Maps in a lot of ways. I don't have an iPhone, so I can't vouch for it myself.

https://news.ycombinator.com/item?id=38032540

https://news.ycombinator.com/item?id=37764369

https://news.ycombinator.com/item?id=37759964

https://news.ycombinator.com/item?id=37750465

You can certainly pick&choose user comments, but aggregate statistics suggest that apple maps have ~10% of the maps market. Although it's not clear what that number would be if they ever released their maps for Android, it's a good indication that they are a distant second at best. Note that this is a _much easier_ problem to solve than search, and they have not been able to dominate it, 11 years after launch, despite their tight control of their platform.

Do you have a citation for these numbers? I'm not at all sure how one would go about measuring that. I see some sources from 2020 claiming ~10%, but it's not clear to me where they're getting that information, and it's old info.

Slight tangent, but I bet apple maps would have a much greater market share if maps.apple.com actually showed something useful. If I go to maps.google.com, I see maps, which is exactly why it's popular.

It’s been better than Google Maps for years for me. Not designed to sell ads (I don’t need to see every McDonald’s on the eastern seaboard) and the directions tended to be safer and more accurate on timing by relying less on dangerous moves like unprotected left turns on major roads.

The bike directions are MUCH safer, too.

I prefer these days while it doesn’t have a feature parody with Google maps. It has a much cleaner interface, doesn’t have ads and half the time gives us better search results.

This also makes the assumption that simply having money will equal a great product.

It takes the right engineers with the right management, and a lot of focus and iteration. You don’t just throw money in a hole and get a great product back.

A lot of companies have had plenty of VC to try beat Google and they haven’t, Microsoft has been trying forever and they still haven’t and they have billions of dollars.

But given how Google gets worse, at some point it should be possible to overtake them?

> 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.

>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+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.

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-...

Bing makes over $11 billion a year now though, so that's not a bad ROI.

>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.

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.

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.

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...

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).

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

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.

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...

Could Apple join hands with Kagi search?

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....

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.

> 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.

> 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

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?

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

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

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