Hacker News Reader

Comment by CobrastanJorji | Hacker News Reader

Ooof. Google gives Apple like a third of its search revenue on iOS searches. Apple gets tens of billions of bucks from this. Presumably it is so much money in part because Microsoft would happily pay half that to be the default instead. But if Google isn't allowed to offer anything at all, Microsoft is free to offer only a sliver of what it otherwise would have, because what's Apple gonna do otherwise, send all of its users to Duck Duck Go?

View on HN

I suspect the biggest concern Apple has is that it’s a big part of their services revenue, which is what’s holding their earnings up currently. They want Services to be seen as a big interesting business, but it’s mostly Google and App Store games. It’d be a big problem for them to report a drop in services revenue, and they’re not going to find anything to replace it quickly enough.

From a legal perspective, Apple's biggest concern, by far, is that this case could set a precedent for using courts to sanction Apple without letting Apple in court. Next to that, revenue is meaningless. Because they can take your revenue from whatever source via judgement, without giving you so much as an opportunity to file a brief in front of the court.

This is one time where there is much more on the line than money. At least for Apple. Maybe for everyone if the Supremes were to say this is OK. (Unlikely in the extreme, but still.)

This is an underrated comment and should be WAY higher. Like a lot of things Apple does, this isn't about the thing itself, but about the next ten to twenty years of related things.

Also consider that a good portion of Apple's services revenue is from services running on GCP, which would be prohibited. They could go all-in with AWS and Azure, but that's a significant tech change and reduces their negotiating power with those alternatives.

And how does that help? You’re going from the 3rd largest cloud provider to the first and second?

Apple already runs some of its workloads on AWS. It was an open secret inside AWS before. But they brought an Apple person on stage at the last reinvent

I think GP point, is that the proposed remedy: “contract between Google and Apple in which there would be anything exchanged of value.” would force Apple ditch all Google services, including GCP. Given paying Google for GCP services would require a contract exchanging something of value.

I know, I’m saying that it is a dumb remedy to “we don’t like BigTech colluding so we are going to force Apple to leave the third largest cloud provider (an also ran) for the first and second largest provider”

It’s a dumb remedy in general, seemingly created without any understanding of the industry.

It makes a lot more sense if you view it as "we're really gonna stick it to Google" and not "we're going to make a more competitive marketplace".

I seriously doubt Apple would move to Bing by default, even if there were some short term monetary gain. Using a subpar/cluttered search interface is so far off from their brand image.

I find it 10x more likely Apple would suddenly find the motivation to make their own search engine if forced to end their deal with Google.

(They say they wouldn't under any circumstance, but seems to be posturing to me)

Regardless, it's clear getting paid Billions to give people the default they'd choose anyway is a good deal for them.

I wonder who at Google negotiated this, because the terms seem very bad for them. They only make sense if the premise was to prevent Apple from starting a competitor

> I find it 10x more likely Apple would suddenly find the motivation to make their own search engine if forced to end their deal with Google.

I think that could only work if someone successfully makes the case internally that an Apple search engine built in to Safari (not as a first-class web app) would boost the Apple brand and/or Safari market share enough to justify it. Maybe even offer it as a subscription.

To monetize it with ads would go completely against their DNA -- ad revenue incentivizes companies to violate users' privacy and build a sub-optimal UX. So it would have to be either a subscription or a platform feature.

How does Apple make money on Apple Maps without ads?

It doesn’t need to. It’s a part of the platform. It’s a necessity.

But I’m sure they make some money off of the Uber/Lyft integration

The $1199 I paid for my iPhone is how they make money on Apple Maps.

>To monetize it with ads would go completely against their DNA

They already do Ads on Apps Store.

> I seriously doubt Apple would move to Bing by default, even if there were some short term monetary gain. Using a subpar/cluttered search interface is so far off from their brand image.

> I find it 10x more likely Apple would suddenly find the motivation to make their own search engine if forced to end their deal with Google.

I find it 10x more likely that in such case they would use white label Bing and do front-end on their own.

Why would Apple be allowed to partner with Microsoft, which is even larger than Google?

> what's Apple gonna do otherwise, send all of its users to Duck Duck Go?

Now that they're not encumbered by the Google deal: build their own search engine.

Yup! And the fact that Apple has so far appeared completely uninterested in doing this (compare this to how aggressively Apple competes against Google Maps!) proves that this anticompetitive financial arrangement harms competition, which harms consumers (and probably even harms advertisers, since having Google Search in such a dominant position means Google has much more pricing power to sell ads than they would if a large chunk of iPhone users moved over to Apple Search).

Apple created maps because Google refused to implement turn by turn directions in the ios version of google maps (for a few years at least).

If I remember correctly apple wanted Turn by Turn navigation while also not adding any ads to the app (essentially be their maps but no revenue).

Apple was paying for Google Map data.

The actual Google maps app was released and had TBT before Apple Maps even came out. The previous/original “Maps” app was using Google map tiles but was written in-house by Apple. Whatever its feature lacks were is on Apple, and Google had already delivered that feature to customers, without Apple needing to spend all that money.

Posting because it's too late to edit, but I realized later that my above comment is wildly wrong. The "Actual Google Maps app" of course did not predate Apple Maps so my point is completely invalid. I regret the error.

I still assume the overall reasons for whatever Apple and Google each did amounted to greed, greed, and more greed.

They have the google deal specifically because they don't want to be in the search engine business.

> In a declaration filed with the U.S. District Court in Washington, Apple Senior Vice President Eddy Cue said creating a search engine would require diverting significant capital and employees, while recent AI developments make such an investment "economically risky."

https://fingfx.thomsonreuters.com/gfx/legaldocs/zgvoalybovd/... declaration.pdf

Yeah, it would divert the $20 billion in capital that Goole currently pays Apple to not be in the search engine business.

> Now that they're not encumbered by the Google deal: build their own search engine.

"Encumbered"? Apple wants a deal with Google search. Apple is 'self-encumbering' themselves: Apple wants the deal so they don't have go through the rigamarole of building it themselves.

Building would cost a lot and they'd also not be getting cash from Google: so they're doubly hit.

"You mean I don't have to build a search engine, pay for it's upkeep and engineers, AND you'll give me money?" - Tom Cook probably circa > 0 AD

Easy for google to measure their IOS mobile Ad revenue to justify the billions.

Apple has enough spare cash to buy a small country. They can build a search engine if they wanted to.

There's a reason there are only a dozen or so successful search engines worldwide, and maybe five successful image search engines. The margins are razor thin, it's a constant battle against "SEO optimisers" trying to ruin search engines for profit, and the moment they get popular governments start coming up with very creepy requests and demands.

It'll cost them billions and they won't know if they can even beat Google before Google drops them as a client for trying to compete with them, taking out a lucrative multi billion dollar deal for a default setting.

No, I think they'll just contract Microsoft Bing and rid themselves of the risks. They're already incorporating Microsoft's side OpenAI side project into their service stack, so it'd just make sense to couple further. Maybe the American government will sue them for that deal as well, but before that's final there will be years of not decades of lawsuits and appeals.

Apple is one of the most valuable companies in the world. They'd probably just buy an also ran search engine and make it the default. I'd say the only reason they didn't do this already was Google's money bag was so big and replacing them would be so easy if it shrank or disappeared.

Smaller companies are the ones that will really get screwed by this ruling, Apple will be fine.

That would possibly recoup the laziest of users but wouldn't the bulk simply switch to Google, leaving Apple with none of that revenue?

Exactly. Users have to manually download Chrome yet it has a 70% market share. Changing the search engine on mobile is already easy enough, far easier than installing a browser. Google will get a majority of its share back, while Apple will get nothing.

Google has a strong position in search, and pushes Chrome every time you hit their top level page. Also Chrome is the default on Android, yeah? I don't think you can extrapolate from that market share to determine how likely people are to change browsers.

The parent's market share claim is for desktop OSes, where Android is irrelevant.

It's still far easier to not install chrome than it is to install it: downloading a thing, running the downloaded thing, click through all the dialogs, ignore all of Windows's nags to stick with Edge (which is probably a greater abuse of platform control than advertising on the search page), ...

Ah, my error -- thank you!

I think a lot of companies switched to pushing Chrome via device management during the later IE days and never switched back. Presumably that's a decent chunk of market

> Google will get a majority of its share back, while Apple will get nothing.

Then you would have to ask, if people would only switch back to Google anyway, why is Google paying them currently? Depriving Apple of the incentive to develop a competing search engine good enough for people to willingly use.

Honestly it's the only logical conclusion.

Otherwise the terms of the deal are terrible for Google

Not on iPhone. Chrome has 30% market share.

Because Chrome isn't a thing on iPhone. It's Safari webview with a very thin layer of Chrome branding around it. Users have very little incentive to switch. And considering Google search is the default on both, Google doesn't have much of an incentive to push users either.

Google doesn’t care about Chromium (the engine) being on iOS. They care most about getting user data from people using Chrome on iOS.

They might, if Google hadn't enshittified their own product over the last few years. At this point, I will at least listen to anyone who says they're willing to take search seriously again.

It was Google's game to lose, and they seem to be trying their hardest to do just that, without any help from competitors or the government.

If so, why is Google paying Apple billions? Insurance against the risk that that isn’t true? Seems like an expensive insurance…

If the revenue is worth the cost, why leave it to chance?

Internet Explorer seemed impossible to beat when it was packed in with Windows, and yet Chrome is now the dominant browser.

I'm sure that isn't lost on Google. The change might not happen overnight but why even let it start if you can afford not to.

The payoff disincentivizes Apple from competing and ensures Google does not need to compete. I would assume there's also some kind of exclusivity such that Apple is also incentivized to promote Google search over others.

Google would likely win the melee but not without unknown effort. Loss of users + risk + higher maintenance cost is all part of the equation.

Or just don't use a default at all and have users select a search provider when they get their phones. Would mean they don't get any kickbacks though. They could also, and probably should, route most requests through Siri first, that is, when they finally get Siri up to the level of modern LLMs.

Or Kagi :D

Which pays Google…

How does Kagi pay Google

They pay Google for search results and are a front end for it with.

Lots of sources, including their own indexer [1]

[1] https://help.kagi.com/kagi/search-details/search-sources.htm...

> Microsoft is free to offer only a sliver of what it otherwise would have

Would Apple even be able to make a deal with anyone at that point?

Of course they would make a half assed Siri Search. Oh wait, that might work.

> what's Apple gonna do otherwise, send all of its users to Duck Duck Go?

I mean, ye

Reply on news.ycombinator.com