Google Paid Apple $1 Billion to Be Default Search Engine on iOS

| Editorial

Google paid Apple as much as $1 billion just to be the default search engine in iOS in 2014. That number comes to us from court transcripts, as reported by Bloomberg, and it highlights the complicated relationship Apple and Google have.

Apple and Google

The two companies are arch-rivals in the mobile space, and Apple CEO Tim Cook has repeatedly criticized Google's business model, where we are the product, not the customer. The late Steve Jobs called Android a stolen product for early versions of the operating system that took elements from Apple's iOS. Apple also went from partnering with Google on mobile maps to developing its own in-house mapping service called Apple Maps.

Yet the two companies continue to work together in a number of ways, including the billion dollar deal for Google to be the default search engine in Safari. More interestingly, that number comes from a revenue sharing agreement, not a flat fee.

According to court transcripts in an ongoing legal fight between Oracle and Google, where Google stands accused of using parts of Java in Android without permission, Google is paying Apple a percentage of revenue generated from those searches, and in 2014, that resulted in a billion dollars for Apple.

In another interesting tidbit from this news, the court transcripts included a percentage—34 percent—though it was unclear whether that was Apple's cut or Google's cut (my educated guess is that it's Apple's cut). This has been a closely guarded secret by both companies, and Google tried to get that part of the transcript sealed.

In a January 20th court filing arguing for the seal, Google said, "The specific financial terms of Google's agreement with Apple are highly sensitive to both Google and Apple. Both Apple and Google have always treated this information as extremely confidential."

A judge disagreed, at least initially, but Bloomberg noted the information disappeared from the transcript anyway, though after Bloomberg saw it.

All of this emphasizes the complicated relationship Google and Apple have. Google dominates the smartphone industry, but only if you count the raw number of devices sold. If you look at other metrics, like mindshare, profits from hardware, and even where Google makes most of its mobile money, iOS wins. And in the meanwhile, Apple gets a phat billion bones a year for doing little more than letting Google play in its sandbox.

And they're both united in wanting to keep that last bit secret, only it's too late.

In closing: having the best search engine in the world? Priceless. Keeping it on iOS? $1 billion.

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Lee Dronick

  having the best search engine in the world?

I have switched to Bing and only occasionally do I look back


Similar story here, Lee.  I switched to Duck Duck Go and have been very happy with it.  Especially the privacy aspects of it.  They are a little weak on image searches, so I do find myself over at Google on the rare occasions I can’t find the image I’m looking for over at Duck.

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