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Apple to Make US$ 1 Billion from Google to Remain Default Search Engine on iOS

Long have there been rumors of a deal between Apple and Google to keep Google as the default search engine on iOS devices. According to Scott Devitt in a recent investor report, One Morgan Stanley analyst has pegged that deal as one based on a per device sold basis, and it could be worth US$ 1 billion this year alone.

Google in, Microsoft Out?

Does it matter if Google is the default search engine in iPhones and iPads? It's easy enough to adjust the settings for whichever is preferred. According to Devitt's report, it matters because of how the deal is set up. If Apple is getting paid per device sold, the more devices it sells, the more money Google has to pay.

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Devitt's estimates on traffic acquisition cost for Google

Google already controls nearly 95 percent of the mobile search market, Devitt estimates, so either way, it stays ahead of Microsoft's Bing search engine. This apparently is important to investors who think Google is spending too much money on attracting people to its search offerings on iOS. Devitt calls it traffic acquisition cost, and he says it could increase around five percent per year, and not spiral out of control.

Search Deeper: Google's Deal is All Business

If Devitt is right, Google is paying out some serious coin for the rights to iOS users' search details. But Google also has the Android platform to cover itself on the mobile side, and it's already hired futurist Ray Kurzweil to help it innovate on that end.

Apple was the innovative winner when it debuted the Siri voice control system in 2011, and both Google and Microsoft have been working on similar technology. In the short term, this has helped Apple sell millions of i-devices, and this has naturally led to speculation of the Google versus Apple variety.

In the world of search, however, it's really Google versus everybody else, and while Microsoft has made some headway, it's already losing out to the Russian made Yandex system in some cases. Microsoft has been busy integrating search into its other popular products like Office 365. It's also launched its own social network that incorporates Bing at its Core.

Devitt's estimates may be on the money, but even if they're off by a little bit, it's still a good, in depth look at how Google approaches mobile search.

 
 
 
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