Google paid Apple $1B to be default iOS search bar provider in 2014

AppleInsider

Court documents from Oracle's copyright lawsuit against Google show the Internet search giant paid some $1 billion to Apple in 2014 in return for making its search bar the default option on iOS.

In a public transcript of ongoing court proceedings, an Oracle lawyer is quoted as saying Google paid out the funds as part of a revenue sharing agreement with Apple, reports Bloomberg. Terms of the contract are unclear, but Google apparently handed over a percentage of revenue generated through iOS device searches.

Today's report confirms years of speculation concerning the benefits Apple reaps by allowing Google to process -- and glean data from -- iOS searches. In 2013 it was estimated that Apple takes in more than $1 billion from Google search referrals, though neither company has commented officially on those numbers.

Oracle's attorney, Annette Hurst, noted in court last week that an unnamed Google witness interviewed during pretrial proceedings said, "at one point in time the revenue share was 34 percent." Bloomberg was unable to gather whether the percentage reflects the share Google keeps or pays to Apple.

Google lawyers attempted to strike Hurst's statements regarding the 34 percent amount from the official record, but was rebuffed by presiding Judge William Alsup. A subsequent filing requested the transcript be sealed and redacted as the information could prove detrimental in negotiating terms with other companies. Apple made a separate filing asking the same.

The revelation contrasts Apple CEO Tim Cook's stance on privacy. The Apple chief has on many occasions decried companies -- Google -- that monetize personal data, including information gathered from Web searches.

"You might like these so-called free services, but we don't think they're worth having your email, your search history and now even your family photos data mined and sold off for God knows what advertising purpose," Cook said at the Electronic Privacy Information Center's Champions of Freedom event event last year. "And we think some day, customers will see this for what it is."

For its part, Apple does not market, support or implement products that gather sensitive user data. Current iterations of iOS apps and services like Maps, Health and the embattled iAd platform transport and store user information, but that data is protected and for the most part anonymized. Importantly, Apple does not monetize its customer base.

Oracle is suing Google for allegedly using unlicensed Java software to build the Android operating system.

tenly

Wow!  That 2nd last paragraph is a joke!!!  Tim Cook is a bad guy now because he took money from Google - and Google earns its money from the use of personal data?  Come on....that is a ridiculous assertion.  Using that logic - anyone who does any kind of business with Google is guilty of invading our privacy.  Google paid to get the top spot in search.  That's all.   That last paragraph tries to make it sound like Tim Cook secretly gathered user data and sold it to Google.  Get real!!! 

mubaili

The truth is Google is best in search by a big margin. Apple has to make Google the default search engine. Well, in that case it might as well just take some money from Google as well. People would call for Tim's head to roll if Google is not the default search engine.

anantksundaram

mubaili said:

The truth is Google is best in search by a big margin. Apple has to make Google the default search engine. Well, in that case it might as well just take some money from Google as well. People would call for Tim's head to roll if Google is not the default search engine.

Agreed. We can dislike Google for a whole lot of things, but we have to recognize and accept that they are the biggest global go-to for search. Apple would be shooting itself in the foot -- other than among the cognoscenti -- if it let Google go.

I am surprised and quite impressed that Apple managed to get a billion dollars out of them to do the obvious....

gadgetcanadav2

According to the court case, Apple is getting up to 34% of the revenue sharing from Google, nowhere does it say Apple got a one time payment of $1 billion. What I think is hypocritical here is Tim Cook bashing other companies that track people and abuse their privacy but Apple has no problem taking 34% ongoing revenue share from Google who makes their money doing just that. The simple fact is Apple has made a deal to take 34% of the advertising money Google makes from tracking iOS users. Would Steve Jobs do this for $1 billion or would he go tell Google to F...Off and then go make an Apple search engine the default? I think he would do the latter. BTW, I would switch to the Google search engine anyways because it is the best but Apple should not be bashing their bedmates while preaching holier than though privacy ideals.

avidthinker

Whatever...if you're like me and don't particularly care for Google products, just change your defaults to DDG or Bing (barf!).  But as a diehard Apple shareholder, I will gladly take Alphabet's money to the bank just for rights to the default setting.  Maybe Apple should renegotiate and take an even more onerous cut.  The Goog needs iOS more than the other way around.

tenly

gadgetcanadav2 said:

According to the court case, Apple is getting up to 34% of the revenue sharing from Google, nowhere does it say Apple got a one time payment of $1 billion. What I think is hypocritical here is Tim Cook bashing other companies that track people and abuse their privacy but Apple has no problem taking 34% ongoing revenue share from Google who makes their money doing just that. The simple fact is Apple has made a deal to take 34% of the advertising money Google makes from tracking iOS users. Would Steve Jobs do this for $1 billion or would he go tell Google to F...Off and then go make an Apple search engine the default? I think he would do the latter. BTW, I would switch to the Google search engine anyways because it is the best but Apple should not be bashing their bedmates while preaching holier than though privacy ideals.

Wrong!  Apple took a cut of advertising revenues - not tracking revenues.  They don't force users to use Google.  They provide it as an option - because they have to.  They made it the default option for 34% of ad revenue.  They continue to be vocal about how they (Apple) are not in the business of harvesting user data and how they disagree with the practice.  Everything is above board and how it should be.
Shareholders would revolt if Apple turned down a billion dollars in revenue for the reasons you're suggesting they should have.  They absolutely should continue to "bash their bedmates" as you phrased it.  They would be guilty of everything you claim *IF* they took the money and STOPPED bashing Google.  They have sacrificed nothing and managed to add a billion dollars in revenue to their bottom line for doing something they had to do anyhow!  (there is no way they could omit google from the available search engines!). Bravo Tim!

delreyjones

adrayven said:

OK.. lets be clear. The search contract was a multi-year deal that started in 2007, was re-upped every few years; which Apple didn't renew BECAUSE of their privacy stance.

Sure, they got paid in 2014 for being default search, they had a contract to fulfill after all. However, in 2015, Apple dropped Google at the SAME TIME Tim Cook gave his speech on privacy..

Are you saying that in 2014 Google was the default search engine for iOS, but it no longer was the default in 2015?  That's what I think you're saying, but I don't think that's true.  Can someone else comment on this?  Isn't Google the default even today?  

buckalec

Honestly thought it was closer to 2B- hopefully is, on Jan 26.
Horace at Asymco has a good take on this stuff. It's a big part of
the "should/if or when apple enter search.They have the tech.

ksec

gadgetcanadav2 said:

According to the court case, Apple is getting up to 34% of the revenue sharing from Google, nowhere does it say Apple got a one time payment of $1 billion. What I think is hypocritical here is Tim Cook bashing other companies that track people and abuse their privacy but Apple has no problem taking 34% ongoing revenue share from Google who makes their money doing just that. The simple fact is Apple has made a deal to take 34% of the advertising money Google makes from tracking iOS users. Would Steve Jobs do this for $1 billion or would he go tell Google to F...Off and then go make an Apple search engine the default? I think he would do the latter. BTW, I would switch to the Google search engine anyways because it is the best but Apple should not be bashing their bedmates while preaching holier than though privacy ideals.

Nope, he will continue to use Google since it provides better user experience, and may be secretly working on alternative until he thinks it is good enough.

But then again, Apps, Siri, and Spotlight are doing most of the work now, or at least Apple hopes to. 80% of Context Searches are now better handle by Apple Spotlight and Siri, Leaving the complex searches to Google.

latifbp

adrayven said:

OK.. lets be clear. The search contract was a multi-year deal that started in 2007, was re-upped every few years; which Apple didn't renew BECAUSE of their privacy stance.

Sure, they got paid in 2014 for being default search, they had a contract to fulfill after all. However, in 2015, Apple dropped Google at the SAME TIME Tim Cook gave his speech on privacy..

This doesn't conflict with, but actually BACKS UP the companies stance by putting their money where their mouth is.. or as in this case, loosing $1B a year to back up their view.

I know Siri defaults to a Bing web search. But is Google not set to the default browser in Safari?

levi

adrayven said:

OK.. lets be clear. The search contract was a multi-year deal that started in 2007, was re-upped every few years; which Apple didn't renew BECAUSE of their privacy stance.

Sure, they got paid in 2014 for being default search, they had a contract to fulfill after all. However, in 2015, Apple dropped Google at the SAME TIME Tim Cook gave his speech on privacy..

This doesn't conflict with, but actually BACKS UP the companies stance by putting their money where their mouth is.. or as in this case, loosing $1B a year to back up their view.

Where did you get the idea that Apple dropped Google? Apple uses other sources for Siri search, but still uses Google as the default search engine for Safari. User can choose Yahoo, Bing or DDG, but Google is the default. Also, the article doesn't refute a multi year deal. It says Apple was paid $1B for 2014. It's possible this was an annual fee, a share of ad revenue, or combination of both. 

cali

Doesn't Giggle make something like %40 of it's revenue from iOS devices?

I feel like %34 isn't enough. Hope Apple bumps it up closer to %40 so that they make about %15 of Goog's revenue at least.

Good job on Apple's part. I'm hoping they use this money to fund iPhone development. Would be nice if Goog funded all of iPhone's development.

entropys

Google is still the default, but I use DDG. 

I believe DDG it isn't quite as good as Google, but it doesn't track me as much, and it isn't that much less good.

tomkarl

entropys said:

Google is still the default, but I use DDG. 

I believe DDG it isn't quite as good as Google, but it doesn't track me as much, and it isn't that much less good.

+1

brakken

I am amazed.
Goog pays Apple a cool billion and - guess what! - it's bad news for Apple! Even on this fucking website!

awilliams87

mubaili said:

The truth is Google is best in search by a big margin. Apple has to make Google the default search engine. Well, in that case it might as well just take some money from Google as well. People would call for Tim's head to roll if Google is not the default search engine.

Disagreed. While Google is probably the best search solution, it certainly isn't by a big margin at all. 

awilliams87

levi said:

adrayven said:

OK.. lets be clear. The search contract was a multi-year deal that started in 2007, was re-upped every few years; which Apple didn't renew BECAUSE of their privacy stance.

Sure, they got paid in 2014 for being default search, they had a contract to fulfill after all. However, in 2015, Apple dropped Google at the SAME TIME Tim Cook gave his speech on privacy..

This doesn't conflict with, but actually BACKS UP the companies stance by putting their money where their mouth is.. or as in this case, loosing $1B a year to back up their view.

Where did you get the idea that Apple dropped Google? Apple uses other sources for Siri search, but still uses Google as the default search engine for Safari. User can choose Yahoo, Bing or DDG, but Google is the default. Also, the article doesn't refute a multi year deal. It says Apple was paid $1B for 2014. It's possible this was an annual fee, a share of ad revenue, or combination of both. 

Safari is the only place currently where Google is used though. They dropped them from spotlight, Siri search, and maps.

anantksundaram

awilliams87 said:

mubaili said:

The truth is Google is best in search by a big margin. Apple has to make Google the default search engine. Well, in that case it might as well just take some money from Google as well. People would call for Tim's head to roll if Google is not the default search engine.

Disagreed. While Google is probably the best search solution, it certainly isn't by a big margin at all. 

Um...what? http://www.statista.com/statistics/216573/worldwide-market-share-of-search-engines/

runbuh

tenly said:

Wrong!  Apple took a cut of advertising revenues - not tracking revenues.  They don't force users to use Google.  They provide it as an option - because they have to.  They made it the default option for 34% of ad revenue.  They continue to be vocal about how they (Apple) are not in the business of harvesting user data and how they disagree with the practice.  Everything is above board and how it should be.
Shareholders would revolt if Apple turned down a billion dollars in revenue for the reasons you're suggesting they should have.  They absolutely should continue to "bash their bedmates" as you phrased it.  They would be guilty of everything you claim *IF* they took the money and STOPPED bashing Google.  They have sacrificed nothing and managed to add a billion dollars in revenue to their bottom line for doing something they had to do anyhow!  (there is no way they could omit google from the available search engines!). Bravo Tim!

I think the concern here is that Apple is willfully profiting from a service which violates their stated stance on privacy.  Many of us would call that hypocrisy.

gatorguy

tenly said:

Wow!  That 2nd last paragraph is a joke!!!  Tim Cook is a bad guy now because he took money from Google - and Google earns its money from the use of personal data?

...

Wrong!  Apple took a cut of advertising revenues - not tracking revenues.

Google earns most of it's revenue thru ad placement, and from companies like Proctor and Gamble, GE, Ford and yes even Apple. BTW, data used for ad purposes is anonymized not personal if that matters. 
2nd comment is spot on... because Google has no tracking revenues so nothing to share in the first place.

Also if Bing is now the default for some of Apple's services I would assume Microsoft also shares some of their targeted ad revenue with Apple. No reason to change the revenue model.