Search engine giant Google is reportedly paying a staggering amount to Apple, with figures ranging between $18 to $20 billion. According to a report by The Register, this payment, as suggested by market research firm Bernstein, is for Google to retain its position as the default search engine on Apple’s Safari browser.
The significance of being the default
Apple’s Safari browser, the primary choice for millions of iPhone and Mac users, plays a pivotal role in the digital ecosystem. Being the default search engine on such a platform is invaluable. For Google, this ensures its search services are at the forefront for Apple users, translating to increased traffic and potential advertising revenue.
While the specifics of the deal remain confidential, the benefits for both tech behemoths are evident. Apple gains a substantial revenue stream, while Google solidifies its dominance in the search engine sector.
This revelation comes at a time when Google faces antitrust scrutiny over its search engine dominance. Last month, the U.S. Department of Justice case against Google’s alleged anticompetitive tactics went to trial. Part of the lawsuit focuses on Google’s agreement with Apple to be the default search engine, arguing that such deals stifle competition.
“We believe there is a possibility that federal courts rule against Google and force it to terminate its search deal with Apple,” the Bernstein analyst told The Register. And while that would be an obvious blow to Google, the deal accounts for an estimated 14-16% of Apple’s annual operating profits, according to Bernstein.
Speculation about Google’s payments to Apple isn’t new. However, Bernstein’s recent estimate indicates one of the highest figures discussed publicly.
This purported payment underscores the fierce rivalry in the digital search market. As tech giants like Google and Apple strategize in the digital landscape, such agreements provide insight into their tactical moves.
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