Ask HN: Why is Google paying Apple to be default search engine on iPhones? | Hacker News Reader

Ask HN: Why is Google paying Apple to be default search engine on iPhones?

5 pointsmrkramer12 comments

I don't understand why Google pays Apple to be default search engine on Iphone when Google's market share and brand is so big that no way any other search engine hurts it anytime soon?

Allegedly Google pays between $8 billion and $12 billion each year to be default search engine on Iphones and Ipads[1]. They could stop paying Apple and save $12 billion every year.

My only reasoning is if Google doesn't pay some other search engine will for example Bing but then again Google is the most searched word on Bing[2].

So Google is entrapped in a situation where they are afraid not to be default search engine on Apple devices because Microsoft could jump in or even Apple itself with its future search engine. I don't see how this decision is reasonable because let's say Google pays $100bn in 10 years that's a lot of money that could've been invested elsewhere or even in Google Search itself.

This brings me to conclusion that Peter Thiel was right when he said Google bets that no one else will come with better search technology so Google uses its enormous cash flow to stay dominant instead of investing all that cash to improve search technology and and come up with search innovations[3].

[1] https://www.cnbc.com/2020/10/21/apple-services-success-story-bolstered-by-huge-google-payments.html

[2] https://www.bbc.com/news/technology-58749525

[3] https://www.youtube.com/watch?v=2Q26XIKtwXQ

Same reason why people pay to get cancer screenings instead of just waiting until they potentially get cancer and then get chemo.

Once you detect there's a problem it can be very difficult to stop the spread.

Let's say Google did stop paying Apple. Initially there would likely be no change. If and when there's an issue, whether that's from Bing or Apple launching their own service, presumably it has too much mindshare for people to go back to Google, and that point a crack in Google's search dominance has be made.

Then it's just a matter of money to carve out a significant niche.

Better to just pay up front and ensure that doesn't even happen.

>Let's say Google did stop paying Apple. Initially there would likely be no change. If and when there's an issue, whether that's from Bing or Apple launching their own service, presumably it has too much mindshare for people to go back to Google

This would be Apple and Microsoft giving Google taste of its own medicine(make it hard for people to go back to Google)

>Better to just pay up front and ensure that doesn't even happen.

Is that even legal? I guess antitrust will show but "default software" seems little bit sketchy but I'm not a lawyer. I guess I'm too open and liberal I would always ask users and give them a choice.

Because Apple could launch a competing search service, that would potentially be competitive, thanks to how many users and data Apple would get through it.

That search service could then spread beyond the iPhone, into Google's territory.

Yea that was my thinking too. I always wondered why Apple or Facebook didn't make their internet search engine considering how many users and data they have.

I don’t know whether it is true, but a simple explanation would be “because they make more in profits from the ads they serve as a consequence of it”.

Yea but my argument was instead of paying Apple to be default search engine on iOS devices they could invest all that money in improving search technology which would bring them more revenue from ads.

Users care about UX so if Google is the best internet search engine out there they will use Google if not they will use something else. Now iOS users are presented with Google as their default search engine not because they think Google is the best but because Google pays to be default search engine on iOS devices.

Assuming they make a profit they could still do that.

Say Google has five billion dollars, and they spend it all making Google the default on iOS.

If this nets them six billion dollars, then they now have an extra billion to do anything that we might suggest.

They have cash pile to do it but $8bn-$12bn a year only for Apple is a lot of money.

I always thought big tech companies are super competitive. Paying Apple to be default search engine is like surrender without fighting. Android was and is huge success for Google but it seems like they want iOS users too or in another words the whole mobile userbase.

I think Google still pays Mozilla to be default search engine on Firefox and this shows their monopolistic tendencies. I have nothing against monopoly it is the goal of every for profit company but you need to compete not pay to be default.

80% of google’s mobile ad revenue happens on iOS.

Google is dead without iOS.

Like most questions of advertising effectiveness, this is one of those things that's hard to know without doing. They know how much the spend, and they know how much use and revenue they get from that placement, but it's hard to know how much use would move from the new default to them if they stopped paying. I'd guess this placement is revenue positive for them, but I don't know if there's public reporting on that level of detail.

They may have some insight from where defaults changed in some regions on some platforms or some devices.

Spending billions to improve search UX or whatever isn't exactly a spigot you just turn on, either.

Also, it's not like spending the money on placement means there's no money to spend on other things, Google has the resources to do both.

I think the most tragic thing that could happen for Google is Microsoft paying for Bing to be default search engine on iOS devices. Then users would most likely realise that Bing and Google are almost the same in terms of search quality and Google's brand would start to weaken. I think the brilliance of Google is their walled garden or family of apps they built around search e.g.(Gmail, Maps, YouTube, Images, Books etc.)

Google needs apple more than apple needs google

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