Google Reportedly Paid Apple $1 Billion to be its Default Search Engine
Google’s monogamous attitude is coming to the fore again and 2013 reports by Morgan Stanley and Macquarie Capital only serve as major proof of that. According to these reports, the search giant was paying Apple an annual fee of around $1 billion to feature as a default search engine on Safari – Apple’s default premium browsing platform.
Add to that Bloomberg’s report, followed-up by Oracle’s copyright suit – “Apple received $1 billion from its rival in 2014”. This serves as further proof of Google’s monogamous ways of dominating the overall search scenario.
The image below, from 2012 Macquarie Capital report, clearly depicts that the Google-Apple financial deal did happen two years ago. But both Macquarie and Morgan Stanley’s reports seem to differ on the total sum that was being paid to Apple as part of this deal. On one hand Macquarie’s report estimates that Apple received an annual fee of around $1.3 billion, on the other hand Morgan Stanley reports that a total of $1 billion was being paid to Apple to do the needful.
Of the two revenue share reports, Macquarie’s looks more authentic than Morgan Stanley’s version. Oracle’s copyright suit confirms the development by claiming that as part of the deal, a revenue share of 34% was decided between the two parties. But there are no further hints regarding which one of the two parties emerged as the beneficiary party?
When quizzed about the development, both Apple and Google declined to make any further comment on Bloomberg’s report on the matter.
However, a 2015 Goldman Sachs report revealed that Google’s mobile search revenue accounted nearly $12 billion, that includes 75 percent of total revenue from iOS devices. Under that premise, it can be said that the deal worth might have been more than $1 billion.
This was more or less confirmed by Google’s Omid Kordestani in his last year’s statement that the Apple deal, which is yet to expire, is a significant one. In fact, this is one deal that even Microsoft and Yahoo were rumored to be interested in.
However, no one from Google or Apple, since May last year, came out in public to make any statement on the continuation of the deal. This indicates that the deal must have been unofficially revived between the two parties. There are even reports that a number of financial experts are against the deal norms and have advised the search giant to not pay Apple for the default search privileges for the user base that it enjoys.
According to reports, Google’s 2014’s total traffic acquisition was around $13.5 billion and is likely to surge to $14 billion for 2015.
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