safari

Google Pays an Estimated $3 Billion To Stay as Default Search on iOS

search engine

Google is, hands down, the go-to search engine for millions of people world wide.  So it only makes sense that Google wants to be in the hands of everyone with an iPhone.  But did you ever stop to think about how much this costs Google?  It’s estimated to be somewhere around $3 billion.  Yes, that’s a B.  Let’s stop to think about that for a moment.  That’s an insane number.  Especially when we know Apple is rolling in the dough.  But on the other hand, this is a really incredible deal for Apple and even Google.  Why?  Well, it’s estimated that there are 700 million iPhones being used worldwide.  If Google doesn’t pay for that connection, it’s mission out on a large number of people not able to use their product.

When I first read about this, I actually thought it meant Apple had decided to switch from using Safari to the Google search app.  Nope!  I could see that being a big deal, but this is just the rights to be the search engine within Safari.  Which seems crazy to me.  Or at least it does from the perspective of how much Google is paying for that ability.  Like I said, billions.  I also wondered, if then we would start to see things like Google Maps being used instead of Apple Maps.  And then I wondered where this would end.  But I was brought back to reality when I realized, again, that it’s within Safari.  Note – Google Maps was previously used in an older version of iOS.

I ask you this, though, is this worth it for Google?  First off, I should let you know that this price is an estimate.  Based on the fact that Google paid $1 billion in 2014.  Someone who is far better at math than I am, determined this value based on a calculation.  So this might not even be the full value.  Apple is keeping their mouth shut about it, so how do we know it’s not even higher?  If it was a lower number, I suspect someone would have told us that we have it wrong.  You would only keep quiet if the number is accurate, or low.

google apple

Getting back to my question though, is this worth it?  I think that Apple is the winner in this one.  Yes, I asked the question about Google, but I can’t really see a downside.  It does cost them money, but otherwise, people wouldn’t use Google.  I, for example, hate having more than one app on my phone that does the same thing.  So I’m not likely going to download a Google app, in addition to the Apple default that I have on my phone.  So it’s possible that I wouldn’t use Google if it wasn’t available on my phone.

Why this is a win for Apple has to do with being able to determine what apps will be found in iOS by default.  Apple has a lot of power here.  And the ability to generate a lot of revenue.  It’s estimated that 5% of Apple’s operating profit actually comes from Google.  That’s insane.  Maybe it doesn’t sound like a lot, but think about what Apple could do to offset their operating costs, just through service deals?  And I would also argue that it doesn’t hurt Apple because what other search engine would they use?  Yes, they could use another one, or even something they develop in house.  But why would you do that?  Especially when you’re getting paid to use the best operating system out there?  I stand by my statement that this is a bigger win for Apple.