Google Could Pay Apple $15 Billion to Maintain Default iOS Search Engine Status in 2021, Suggests Analyst

[MacRumors]

It's no secret that Apple and Google have a considerable monetary agreement that ensures Google's position as the default search engine on Apple's devices. In a new investor note by financial advisor Bernstein's Toni Sacconaghi, the analyst claims Google's payment to Apple to maintain the status quo could reach $15 billion in 2021, up from $10 billion last year.

First reported by Ped30, Sacconaghi's note estimates that Google's payments to Apple could continue increasing on-year and approach $18-20 billion in 2022. The Bernstein analyst bases his numbers on Apple's public filings as well as a bottom-up analysis of Google's traffic acquisition costs.

Google's agreement with Apple in the search and advertising markets has been in place for over a decade, but with Google's search engine dominance coming under increasing scrutiny in recent years, Bernstein analysts believe the agreement could face a regulatory risk.

In addition, Yahoo and Microsoft have both been interested in inking a deal with Apple to overthrow Google as the default search engine on iOS devices, and the analysts suggest Google's huge payments to Apple are made to ensure Microsoft doesn't outbid it.

We see two potential risks to GOOG’s payments to AAPL: (1) regulatory risk, which we believe is real, but likely years away; we see a potential 4-5% impact to Apple’s gross profits from an adverse ruling; & (2) that Google chooses to stop paying Apple to be the default search engine altogether, or looks to renegotiate terms and pay less. We have noted in prior research that GOOG is likely paying to ensure Microsoft doesn’t outbid it. That said, with payments likely to approach $18 – $20B in FY 22, it not implausible that Google could revisit its strategy.

Last year, the U.S. Justice Department filed an antitrust lawsuit against Google, claiming the Mountain View-based company has used anticompetitive and exclusionary practices in the search and advertising markets to maintain an unlawful monopoly. One of the main complaints against Google is its deal with Apple that allows Google to be the default search engine on Apple's Safari browser and other search tools.

Last year, Sacconaghi argued Apple should purchase a search engine outright to put pressure on Google. Sacconaghi's reasoning was that Apple doesn't have many alternatives to Google, with its only leverage being a swap to Bing. However, the analyst also warned that such a move could trigger regulatory oversight that could ultimately block the acquisition, putting Apple in a worse position than before.

Speculation mounted in 2020 that Apple was planning to launch its own search engine, after increased activity was noted from its web crawler, but the uptick was later put down to Apple's efforts to improve Siri and Spotlight search results, and the rumor has so far come to nothing.

Article Link: Google Could Pay Apple $15 Billion to Maintain Default iOS Search Engine Status in 2021, Suggests Analyst

 

[vagos]

Speculation mounted in 2020 that Apple was planning to launch its own search engine, after increased activity was noted from its web crawler, but the uptick was later put down to Apple's efforts to improve Siri and Spotlight search results, and the rumor has so far come to nothing.

If we judge by the way Apple music handles search then it's better that they didn't build a search engine after all!

 

[Apple Knowledge Navigator]

And y'all thought TC's stock options were a lot of money!

 

[gmarm]

I never really got this huge sum of money.

Isn’t Google the best search engine and doesn’t Apple want to offer the best to its users?

This should be a win win situation for both companies without any transaction between them, but I’m obviously very wrong. ?

 

[macintoshmac]

Privacy is at the heart of Apple. All 15 billion beats.

 

[duanepatrick]

It could be the default but I will still stick to Brave browser and duckduckgo as my search engine.

 

[TheYayAreaLiving 🎗️]

That’s way too expensive.

 

[TheAustrianGuy]

As much as I hate Google and especially their business model, its search engine is the only usable one.
Save your money, people will switch to Google search anyway.

I tried Bing, I really tried DuckDuckGo.
It was only one thing: Frustrating.

 

[Agit21]

Switched to DuckDuckGo and couldn’t be happier.

 

[StevieD100]

I never really got this huge sum of money.

Isn’t Google the best search engine and doesn’t Apple want to offer the best to its users?

This should be a win win situation for both companies without any transaction between them, but I’m obviously very wrong. ?

Some of us want as little to do with Google as possible. Every interaction that you have with them that can be tracked back to a person will be. Search is especially lucrative. They'll sell the fact that user X is looking for widget Y to a company that sells Y or something similar.
I use DuckDuckGo on some devices and Startpage on others. If I could block google[dot]com then I would but some sites insist on using those stupid captur things.
Google is at the top of my list of sites/companies that with their demise, the world would be a better place.

 

[wanha]

I never really got this huge sum of money.

Isn’t Google the best search engine and doesn’t Apple want to offer the best to its users?

This should be a win win situation for both companies without any transaction between them, but I’m obviously very wrong. ?

I agree that $15 billions sounds like an insane amount of money, but then when you think it gives Google access to the majority of the top 1 billion customers in the world, it all starts to make sense.

I mean, what's the alternative for Google to capture searches from all those premium users?

 

[wanha]

As much as I hate Google and especially their business model, its search engine is the only usable one.
Save your money, people will switch to Google search anyway.

I tried Bing, I really tried DuckDuckGo.
It was only one thing: Frustrating.

DuckDuckGo is using Bing as its search engine anyway.

 

[sinoka56]

$15 Billion is the price Apple accepts to sell users' search privacy (of those that don't use other search engines).

 

[ForkHandles]

I never really got this huge sum of money.

Isn’t Google the best search engine and doesn’t Apple want to offer the best to its users?

This should be a win win situation for both companies without any transaction between them, but I’m obviously very wrong. ?

I moved to duck duck go four months ago. I haven’t noticed any difference to the quality of my search results.
I’m not in Googles ecosystem so the move was quick and effortless

 

[Manzanito]

That’s way too expensive.

Is it? The people running google and apple aren’t exactly idiots, google won’t pay a penny more than they have to and apple won’t take a penny less than they can get away with.

 

[peneaux]

Don’t worry, Apple is sitting in hundreds of billions so they don’t need the money. They will use DuckDuckGo instead since they care about privacy. Privacy is a fundamental right according to Tim Apple. Lol!

 

[whcchief]

Don’t worry, Apple is sitting in hundreds of billions so they don’t need the money. They will use DuckDuckGo instead since they care about privacy. Privacy is a fundamental right according to Tim Apple. Lol!

I've now moved to DDG as well. Thanks for converting me. ?

 

[threesixty360]

Apple is generally a king maker here. They just dont have an ad business where owning a search company makes any sense. In fact, very few people do . Weird, how google is literally the only real benefactor from this and they are so scared of losing it they will pay literally anything.

 

[MVMNT]

Biggest paid ad in history

 

[Mr.Blacky]

Why are some here talking about privacy? ?
Those who care about it, can just chance the default search engine. But I bet, most people will use Google anyway.

 

[contacos]

I am surprised the EU has not demanded a "select your default search engine" pop up yet upon set up.

I personally use Google Search only in private mode or Safari as a whole for that matter (not sure how much that brings actually to staying anonymous lol). The only annoying thing about searching in private mode is that damn cookie banner on Google Search. You actually have to scroll down to get the accept button and I always end up hitting the wrong button.

Anything but search is done via the Duck Duck Browser

 

[Abazigal]

$15 Billion is the price Apple accepts to sell users' search privacy (of those that don't use other search engines).

It’s basically free money if we accept that majority are going to end up using google search anyways.

Which makes me wonder just what would happen if google ever decided to stop paying. Is Apple going to acquire DDG and make it the default search engine on safari or something?

 

[iHorseHead]

Switched to DuckDuckGo and couldn’t be happier.

DuckDuckGo sucks. You can't find anything with it. It's completely useless. Bing and Yahoo! search suck too.
Google is the only usable one. (Especially in Europe). Even Apple Maps sucks in my country, but Google Maps is really great.

 

[Kram Sacul]

Still using Bing and racking up points. Google can suck it.

 

[danny842003]

It’s basically free money if we accept that majority are going to end up using google search anyways.

Which makes me wonder just what would happen if google ever decided to stop paying. Is Apple going to acquire DDG and make it the default search engine on safari or something?

The point is the majority will just use whatever the default is. Plenty don’t know how or care enough to change it.