Apple Reportedly Milked Google for $1 Billion in Search Agreement

Apple Reportedly Milked Google for $1 Billion in Search Agreement

Apple and Google may be bitter enemies in the mobile space, but in a sense, they're also business partners. It's all about the Benjamins, which is why these rivals are both willing to be strange bedfellows, because at the end of the day, both are increasing their bottom line by working together. We're talking about Google's search deal with Apple, in which the sultan of search reportedly paid the Cupertino outfit $1 billion in 2011 to be featured as the default search engine in Safari.

Macquarie analyst Ben Schachter dropped the staggering figure in a recent note to investors, according to BusinessInsider. The revelation comes as Apple appears to moving away from Google Maps, which Schachter believes isn't a big deal. In fact, if Apple were to drop Google search as the default option in Safari, the company would be hurting itself the most.


According to Schachter, Google derived $1.3 billion from searches on Apple. With a 75 percent traffic acquisition cost, Google 'only' profits about $335 million from searches on iOS and Safari, a figure that's easier to absorb than $1 billion if Apple were to dropkick Google entirely. Not only that, but Apple would have to resort to using an inferior search engine, and that could turn away some potential Android defectors.

Bottom line? It's in both of their interests to remain frenemies when it comes to search.
Login or Register to Comment
Post a Comment
Username:   Password: