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Old Feb 11, 2010, 01:46 PM   #1
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Apple's Deal With Google for iPhone Search Pegged at Over $100 Million Per Year



Silicon Alley Insider reports on information from a source claiming that rumors of Apple looking to develop its own search engine are untrue and that Apple's current deal with Google to provide default search functionality for the iPhone is currently worth over $100 million per year to Apple in revenue sharing.
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Our source tells us "there's too many options" for search on the market, so there's no reason for Apple to build its own search engine.

Another reason Apple might not want to build its own search engine: It's getting over $100 million a year from Google in its revenue share deal, according to our source.

For Apple, that's not a lot of money. But, it's enough that it doesn't make sense for Apple to put considerable resources towards building its own Internet search engine. And, if Apple wanted more money or options, there's Microsoft -- with Bing and a big checkbook.
A report from BusinessWeek last month had in fact claimed that Apple and Microsoft have been in talks to make Bing the default search provider for the iPhone as the relationship between Google and Apple has reportedly soured as competition between the two companies has become increasingly intense.

Article Link: Apple's Deal With Google for iPhone Search Pegged at Over $100 Million Per Year
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Old Feb 11, 2010, 01:50 PM   #2
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Like the relationship with microsoft and apple is any better? Bing isn't that good.
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Old Feb 11, 2010, 01:50 PM   #3
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What's a $100M when there's a stash of close to $40B on the books? The competition between Apple and Google will intensify moving forward. I wouldn't discount Apple creating a "search" business over the long-term.
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Old Feb 11, 2010, 01:51 PM   #4
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Makes sense.

I wish someone else would come up with a search engine to compete with google though. The way google treats its business partners sucks. So I would like someone to really give them a run for their money. Even with Yahoo and Bing essentially coming together this year it is still not a formidable challenge to Google.

That being said, I can believe they are making that much money off searches from their products, and that is a nice add on for the revenue.

I think having google search on an iPad will even be more worthwhile as Google can better display the ads.
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Old Feb 11, 2010, 01:59 PM   #5
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Maybe they should invest $100 million a year in developing their own search engine.
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Old Feb 11, 2010, 02:02 PM   #6
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I still think that all this Google / Apple hate talk is crap. They were in love with each other less than half a year ago. Then the feds started investigating their boards. It's all manufactured to make it look like there isn't anything shady going on. They still have a great relationship, I'm sure. Maybe not as great as it used to be, but still pretty solid I'll bet.

Bing on iPhone? Seriously? I really doubted this when it was first rumored, and I wasn't surprised when it never came to pass. I guess there is still the OS 4.0 event next month, but come on, that's extremely unlikely. Steve Jobs holds grudges and Microsoft is a HUGE offender. Way more than Google, though Google is more recent.
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Old Feb 11, 2010, 02:03 PM   #7
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Old Feb 11, 2010, 02:03 PM   #8
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Originally Posted by Maserati7200 View Post
Like the relationship with microsoft and apple is any better? Bing isn't that good.
Apple does like to keep an Ace up its sleeve.

Just as they kept an Intel Version of OS X for years along with the Power PC version in case PowerPC chips were lagging then Apple could quickly switch to Intel.
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Old Feb 11, 2010, 02:05 PM   #9
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Originally Posted by amac4me View Post
What's a $100M when there's a stash of close to $40B on the books? The competition between Apple and Google will intensify moving forward. I wouldn't discount Apple creating a "search" business over the long-term.
You're kidding right? Those $100 million a year would give Apple more incentives to take bigger risks without taking money out of the banks for it. Apple would be more willing to "waste" $100m a year in research and development than to lose it forever. There's a big difference.

It doesn't make sense for Apple to go into the search business at all. Apple is at this moment, crappy at offering web solutions. MobileMe is slow, no reason for it to be slow when they have huge money to invest into infrastructure (other than that $1 billion data center in NC, but 1 data center in US isn't enough). iWork is horribly limited and hasn't been changed in over a year. What other web solutions do they have that's successful?
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Old Feb 11, 2010, 02:07 PM   #10
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Quote:
Originally Posted by MacRumors View Post


It's getting over $100 million a year from Google ... For Apple, that's not a lot of money.
Really? $100M is not a lot of money? Compared to what?

In that case, I suppose $1M is nothing at all, so I'll be happy to provide my account and routing number to Apple's financial people... Deposits are accepted without the need for prior notice.
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Old Feb 11, 2010, 02:09 PM   #11
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I truly hope these two companies can work together going forward. This posturing over the mobile phone market is nothing more than destructive.

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Old Feb 11, 2010, 02:11 PM   #12
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Really? $100M is not a lot of money? Compared to what?

In that case, I suppose $1M is nothing at all, so I'll be happy to provide my account and routing number to Apple's financial people... Deposits are accepted without the need for prior notice.
Compared to the fact that Apple has close to $40 billion dollars in hard cash? He meant to say that Apple could afford to lose over 100 million in exchange to investing into building in their own search engine.
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Old Feb 11, 2010, 02:14 PM   #13
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For Apple, that's not a lot of money.
It must be nice!

Just think how much Bing would pay!
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Old Feb 11, 2010, 02:16 PM   #14
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I realize there's at least a perception that Apple has, in past instances, punished another company for perceived slights - but given the complexity of the online world, companies like Apple, Google, and Microsoft hopefully know how to compartmentalize their disputes.

It's like the Canada-US relationship. We have had significant long-term disagreements over the years, such as the softwood lumber dispute (I live in the Pacific NW, if you wonder why I thought of that one) - but it's not like either country has said "We're mad about your stance on lumber, so we're recalling our ambassador."
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Old Feb 11, 2010, 02:21 PM   #15
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Uh oh, hope I'm not starting yet another Mac rumour... But didn't Google buy the iGuide name?
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Old Feb 11, 2010, 02:23 PM   #16
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Yeah....

The truth is, Google offers a lot of free Internet-based services that benefit practically everyone -- Mac users included. There's no reason Apple can't consider Google a "competitor" in the area of cellphones, while still considering them a "partner" with other things.

Last I checked, OS X had the built-in capability of syncing Address Book contact info with Google, for example. What are they going to do? Rip it out of the next version of OS X, simply out of spite?

They could, but that'd be counter-productive and would amount to a loss of features for end-users, for no good reason.


Quote:
Originally Posted by macduke View Post
I still think that all this Google / Apple hate talk is crap. They were in love with each other less than half a year ago. Then the feds started investigating their boards. It's all manufactured to make it look like there isn't anything shady going on. They still have a great relationship, I'm sure. Maybe not as great as it used to be, but still pretty solid I'll bet.

Bing on iPhone? Seriously? I really doubted this when it was first rumored, and I wasn't surprised when it never came to pass. I guess there is still the OS 4.0 event next month, but come on, that's extremely unlikely. Steve Jobs holds grudges and Microsoft is a HUGE offender. Way more than Google, though Google is more recent.
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Old Feb 11, 2010, 02:24 PM   #17
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Quote:
Originally Posted by MikhailT View Post

...

It doesn't make sense for Apple to go into the search business at all.

...
A general search engine may not make sense, however,
It may make sense for Apple to develop a search engine specific to extend their mapping strategy to reduce it's reliance on Google maps.

(I'm not sure what they had in mind with acquisition of Placebase, but I think Location based search/ advertising / mobility, kinda goes hand in hand)
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Old Feb 11, 2010, 02:27 PM   #18
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Makes me think the reason the Nexus One got multitouch is Google is probably paying for it.
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Old Feb 11, 2010, 02:28 PM   #19
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I agree, there is a lot of good reasons for Apple to move to a different maps engine.
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Old Feb 11, 2010, 02:31 PM   #20
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I personally hope this is true, I still find Google to be the fastest and most accurate search engine and like having it integrated into my iPhone.

Can you seriously imagine an Apple search engine? Me.com absolutely blows (I've been hanging around you yanks too long), it's slow, buggy, and did I mention slow? Spotlight search is pretty good but that's built on pre-existing stuff, it's not like you could base a search engine on it. No, I'm pretty sure it'd be rubbish... I hope they continue to concentrate on the things they're good at.
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Old Feb 11, 2010, 02:41 PM   #21
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Maps

So for maps Apple is using Placebase's Pushpin in Aperture now. Not sure if they were in iPhoto.
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Old Feb 11, 2010, 02:45 PM   #22
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Quote:
Originally Posted by amac4me View Post
What's a $100M when there's a stash of close to $40B on the books? The competition between Apple and Google will intensify moving forward. I wouldn't discount Apple creating a "search" business over the long-term.
Apple has long been a rival with Microsoft but still able to make deals in some areas. Apple can work with Google for search while being a rival in other areas.
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Old Feb 11, 2010, 02:51 PM   #23
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Originally Posted by 840quadra View Post
I truly hope these two companies can work together going forward. This posturing over the mobile phone market is nothing more than destructive.
I hope so as well. Both companies have some great offerings. I've been vocal about fears of Google privacy invasion in the past, but I've gotten over them, and Apple and Google are my two favorite companies in terms of offering products and services that impact my life daily.

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Originally Posted by brian.gillespie View Post
Makes me think the reason the Nexus One got multitouch is Google is probably paying for it.
Good thought. Hadn't heard that one before.
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Old Feb 11, 2010, 02:53 PM   #24
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So for maps Apple is using Placebase's Pushpin in Aperture now. Not sure if they were in iPhoto.
iPhoto appears to be Google Maps to me just now. Copyright notice mentions a few other companies, but Placebase isn't one of them.
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Old Feb 11, 2010, 03:01 PM   #25
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i bet bing becomes the default..i mean. look how much it knows... http://whatbingknows.com haha
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