Title is misleading. Google didn't pay up front to keep the search bar, but rather agreed to share a percentage of the revenue generated, which ended up being $1B.
why? It's effectively the same thing, except the risk profile is different. The resulting revenue wasn't a complete mystery so they probably knew the deal equaled about 1 billion.
But the deal wasn't Google giving Apple $1B to be the default search on iOS. It was Google giving Apple a 34% share (perhaps - it's still a bit unclear in the article) of iOS search revenue. It is still a deal worth ~ $1B, but not a deal for $1B.
The context is important. If the number is 34%, then Google's iOS revenue would be around $3B, of which Apple got a cut.
Oracle is really letting out Google secrets. First Android earnings, now this. Both said not to be public knowledge. Google going to go after oracle now?
There are two types of contempt (civil and criminal) and as a general rule contempt is triggered by violating a Court's Order(s). What Court Order has been violated?
None, because I didn't read the article before asking (shocker, right?). I think it's bad form for the judge to publicly release Google's financial information like that. I have a hard time believing that's normal.
Google also used to pay Mozilla to be the search engine there, until Yahoo outbid them.
It's amazing that Google search, which is quite useful, has negative market value as content. In the cable TV world, there are channels cable systems pay to carry, such as ESPN, and channels that pay to be carried, such as the Jewelry Channel. How did Google end up in the latter category?
Cable TV is a fundamentally wrong analogy here, because there is only one search bar and only one default search provider, not a near-infinite number of channels to be filled.
Being the default search engine on iPhone means you can generate a lot of revenue, and so it is a valuable position to sell. As you say, Google got outbid by Yahoo a couple years ago for Firefox. If Google weren't paying, apple would sell the search bar to somebody else.
I don't use an iPhone so have to ask, can users not select the search engine they want to use? Oneplus tried to change the default search on their phones to Bing and the first thing I did was switch back to Google.
A lot of tech illiterate users don't even know that there are multiple search engines or that you can change the default one. Being the default is highly critical there.
That's not a good measuring stick. Probably even before Google existed search engines we're good at those kinds of searches. But people use search for much more than that.
On iOS — in contrast to Android — you can actually change the default search provider, yes.
(On Android you can't change it at all. And so I'm either stuck with a Google search on the Recents menu, or the "this widget could not be found" message)
If you're talking about within the Chrome app on Android then, unless something changed in Marshmallow, you can totally change the default search provider. Chrome > Menu > Settings > Search Engine allows you to change the default search engine in the browser, but you can't add new ones to their list, so it is a limited set of options available.
If you're talking about at the Google Now or Siri then as far as I know that's not possible on either OS.
The one I find most annoying on Android is the search bar on the home screen. Even though you can customize most of the rest of the screen, you can't change the search provider for that bar, or even just remove the bar. At least, not without replacing the launcher entirely, with something like Nova Launcher (http://novalauncher.com/), which is what I eventually did.
This is not really an android flaw but a nexus one, because its default launcher is part of the google search app. On many android phones, the search box is a widget that can be swapped out with a widget from any other search provider or removed entirely.
I am talking about the Google Search bar in the Recent Apps menu on Android.
It’s at the top since 5.0, can’t be removed, can’t be changed.
If you root and disable the Google App (yes, you now need root for that), then it is replaced with an error message, saying that the Google App could not be found.
There is no way to replace it with a search bar for bing, or remove it.
You're mistaking the context. You first acknowledged that Yahoo had to outbid Google to replace their search engine, which properly recognizes the situation: Google is replaced when it's outbid, or the real-estate owner otherwise has a better value gain to be had from other options.
In the case of Apple, they have numerous other highly valuable directions they could go with a piece of real estate on the iPhone, including selling it to Microsoft or Yahoo.
It would be like claiming that because every free app in existence isn't included by default on a phone, said non-included app/s must therefore have a negative value. My phone for example did not come with kik or viber pre-installed, therefore they have a negative value (not true).
It's worth noting that non-search bar system searches (eg through Siri) are run through Bing. I'm not aware if this was a policy decision (give less power to Google) or a monetary decision (MS paid in an effort to push up Bing's numbers).
Many people don't consider search quality at all and just use what's served to them.
I understand that someone reading HN would find that hard to believe, but when I look at some people around me who are not working in tech - many wouldn't be able to tell difference between Bing and Google search results. All they know is they can type/say a query and get the site they are looking for. The only time they would start thinking about underlying tech. is if they started to consistently get unusable results.
Google results are better, but how many people are actually aware of that (outside IT crowd) is questionable.
I don't think it's about the market value of Google search in isolation (which is large and positive). Instead, it's about two things:
1. The power of browser defaults puts browser vendors in a strong position to demand a cut from third parties that make money from being a default.
2. Yahoo and Bing (plus some regional options) are realistic alternative bidders for this preferred placement. That dramatically tilts the bargaining power towards the browser vendor. With an alternative, however, a browser vendor still makes some money if negotiations with Google break down. Beyond that, a realistic alternative means Google loses more. Assuming negotiations broke down, more users would end up searching at Google if there were no search engine default than would if there were an alternative one.
To build on the cable analogy, suppose sports leagues were required by law to license their broadcasts (with the same terms) to any cable channel that wanted them. In that case, it wouldn't be hard for someone to put together ZSPN and bid away ESPN's carriage fees. ESPN doesn't just get those fees because they have valuable content - they can demand those fees because they have control over that content.
Therefore the iPhone share of total search ad spend is about $3B. This link puts the overall market (inclusive of Android) at roughly $9B in 2014. That makes sense if you assume iOS to represent roughly 1/3 of devices.
Isn't the $9B for all mobile advertising, not just mobile search advertising? According to a Glodman Sachs report for 2014, back then they estimated that iOS advertising accounted for 75% of Google's revenue on mobile. That would make the Android search ad space worth about $1B.
It's not available online. The story originally came from the NY Times, but I think Business Insider has the best info as they directly quoted a section from it.
Bing powers Siri, and I assume now powers all of the internet search functions (unsure about Safari.) So I wonder if Microsoft paid this amount, or if Apple decided that less money made more sense so they could harm their competitor?
Pretty much. And Apple had to roll its own maps because Google would not allow Siri to use maps. Apple Maps are pretty darn good by now, so I think it's safe to assume that Apple started building their own search engine for Siri well before it made a deal with Microsoft, and Bing is a stop-gap measure. Apple likes to own its core technologies.
Not really -- the Apple Maps vs Google Maps trouble started when Google refused to allow turn-by-turn directions until Apple started turning over more user data. If I remember right, Apple Maps launched "early" (before the deal with Google expired) in an effort to put Apple into a more powerful negotiating position.
And if they don't control it, it makes sense for them to have multiple viable alternatives. i.e., spread the money around and don't let one player get too powerful.
In a world so abundant of information, i think user attention is indeed a significant resource every major player should fight for. I guess the distribution of attention follows power law, that a few entrances take up most of the mobile use cases. For example, I use Uber, Wechat, GMaps much more often than the other apps. Search bar definitely is one of the most critical entrances.
