Google reveals higher traffic acquisition payouts, supporting claims of costlier Apple sea...

AppleInsider · October 27, 2017 1:58PM

While Google parent company Alphabet beat forecasts in this week's third-quarter results, pulling in $27.77 billion in revenue, the company simultaneously warned of higher traffic acquisition costs -- likely supporting claims that it's paying Apple more to be the default option in Safari search.

Traffic acquisition spending rose from $2.62 billion a year ago to $3.1 billion, according to Business Insider. As a percentage of ad revenue, that's up from 21 percent to 23 percent.

CFO Ruth Porat didn't explicitly blame the change on Apple, but did link it to a shift to mobile and "changing partner agreements."

Google's placement as the default Web search option on iPhones and iPads generates a high amount of ad revenue the company is likely unwilling to sacrifice. If so, that might allow Apple to raise costs as high as it feels Google can afford. In August, Bernstein analyst A.M. Sacconaghi Jr. estimated that Google may now be paying Apple close to $3 billion per year. For 2014 that sum was just $1 billion.

Conversely, while Safari users do have three other search options -- Bing, Yahoo, and DuckDuckGo -- Google is by far the most popular search engine in most countries. Recently, Apple made Google the default for Web searches via Siri, iOS, and macOS Spotlight, shifting away from Bing.

sflocal · October 27, 2017 2:36PM

Good... Apple should charge even more to allow Google the PRIVILEGE of being on the top search spot on iOS. Google knows it doesn't earn squat on Android, they got to get their money from somewhere.

gatorguy · October 27, 2017 2:50PM

I'm not sure any change would necessarily be due to higher Apple payouts. Google also recently announced they would be sharing more ad revenue with online publishers, aka digital news organizations, explicitly saying "the revenue-share will be very generous in favor of publishers."

spamsandwich · October 27, 2017 2:53PM

I always change the default to DuckDuckGo anyway, so...

jdgaz · October 27, 2017 2:53PM

Apple should acquire DuckDuckGo and make that the default search engine. It works fine.

gatorguy · October 27, 2017 3:16PM

SpamSandwich said:

I always change the default to DuckDuckGo anyway, so...

I'm always open to trying other browsers and search engines. DDG is one of those I've tried every so often, along with Bing and Yahoo. I just don't get the same quality of search results as I get from Google, nor does DDG or Yahoo offer some of the specialty search options that Google does, for me really useful ones like Scholar and Google Patent Search. I'm sure many folks find DDG an such just fine for general queries. It's just not a good search engine for my needs.

edited October 2017

unphocus · October 27, 2017 3:32PM

I use Bing, DDG, Google, and Yahoo search engine. But when I’m searching work related subjects, I use google most of the time. Outside work I use them all alternately.

rayz2016 · October 27, 2017 3:58PM

gatorguy said:

I'm not sure any change would necessarily be due to higher Apple payouts. Google also recently announced they would be sharing more ad revenue with online publishers, aka digital news organizations, explicitly saying "the revenue-share will be very generous in favor of publishers."

I’m not sure I would class this as a traffic acquisition cost.

cali · October 27, 2017 4:59PM

Apple should charge even more especially after being default for Siri.

jdgaz said:

Apple should acquire DuckDuckGo and make that the default search engine. It works fine.

DDG is an ugly impractical name which is why many people don’t know about them or visit the site. Bad marketing.

I know a guy who said his mom switched to iPhone because she disagreed with Google’s spying practices and was disappointed to find that Siri ridirects to Google anyway.

That made it very clear that Apple needs it’s own search engine for Siri alone.
”Siri”, “Spotlight”, “Search” would make some great names for the service.

shapetables · October 27, 2017 6:05PM

GOOG and (especially) AMZN both blew away analyst's expectations. (I think AMZN is up 130 and GOOG is up 60 right now.)

gatorguy · October 27, 2017 7:56PM

Rayz2016 said:

gatorguy said:

I'm not sure any change would necessarily be due to higher Apple payouts. Google also recently announced they would be sharing more ad revenue with online publishers, aka digital news organizations, explicitly saying "the revenue-share will be very generous in favor of publishers."

I’m not sure I would class this as a traffic acquisition cost.

Neither of us are sure then, but I think it would be.

avidthinker · October 27, 2017 8:05PM

hey apple, how much are you charging google? double it. ok google, pay up!

1stntenderbits · October 28, 2017 12:01AM

"You are not the product. " - Apple

/cashes $3 billion check

"Well, yeah... ya kinda are the product. But we ain't sellin' cheap amirite?" - also Apple

rayz2016 · October 28, 2017 3:57AM

gatorguy said:

Rayz2016 said:

gatorguy said:

I'm not sure any change would necessarily be due to higher Apple payouts. Google also recently announced they would be sharing more ad revenue with online publishers, aka digital news organizations, explicitly saying "the revenue-share will be very generous in favor of publishers."

I’m not sure I would class this as a traffic acquisition cost.

Neither of us are sure then, but I think it would be.

Sharing ad revenue is unlikely to be classed as traffic acquisition: if they’re paying out ad revenue on then that traffic has already been acquired.

Traffic acquisition costs is the money Google shells out to drive traffic through their servers.

cali · October 28, 2017 7:25PM

1STnTENDERBITS said:

"You are not the product. " - Apple

/cashes $3 billion check

"Well, yeah... ya kinda are the product. But we ain't sellin' cheap amirite?" - also Apple

The stupidity of one post... Apple isn’t Google. Apple doesn’t pimp it’s users out.

1stntenderbits · October 29, 2017 1:18PM

cali said:

1STnTENDERBITS said:

"You are not the product. " - Apple

/cashes $3 billion check

"Well, yeah... ya kinda are the product. But we ain't sellin' cheap amirite?" - also Apple

The stupidity of one post... Apple isn’t Google. Apple doesn’t pimp it’s users out.

Apple selling your search to Google says you're wrong... and in denial. Not only are you the product, but you're the high margin, highly profitable product that produces around 5% of Apple's total operating profit. So that I'm clear, and you Cali, don't get bogged down in semantics, the you in "you are the product" is the general customer and not you personally. I'm sure Cali uses DDG or some such. The general "you" and your search represents almost $3B in pure profit. No matter the mental gymnastics you, Cali, employ there's no honest way to avoid the fact that you are a product. A commodity to be sold to the highest bidder. Google is that bidder. When it comes up again it might be Microsoft winning that bid. Still gonna be product. Not cheap, but product nonetheless.

So what exactly was stupid in my post?

habi_tweet · October 30, 2017 7:29AM

1STnTENDERBITS said:

cali said:

1STnTENDERBITS said:

"You are not the product. " - Apple

/cashes $3 billion check

"Well, yeah... ya kinda are the product. But we ain't sellin' cheap amirite?" - also Apple

The stupidity of one post... Apple isn’t Google. Apple doesn’t pimp it’s users out.

Apple selling your search to Google says you're wrong... and in denial. Not only are you the product, but you're the high margin, highly profitable product that produces around 5% of Apple's total operating profit. So that I'm clear, and you Cali, don't get bogged down in semantics, the you in "you are the product" is the general customer and not you personally. I'm sure Cali uses DDG or some such. The general "you" and your search represents almost $3B in pure profit. No matter the mental gymnastics you, Cali, employ there's no honest way to avoid the fact that you are a product. A commodity to be sold to the highest bidder. Google is that bidder. When it comes up again it might be Microsoft winning that bid. Still gonna be product. Not cheap, but product nonetheless.

So what exactly was stupid in my post?

Umm, missed the point? Google = no options, Apple = default + options... your comparing apples with onions...

dasanman69 · October 30, 2017 11:21AM

Habi_tweet said:

1STnTENDERBITS said:

cali said:

1STnTENDERBITS said:

"You are not the product. " - Apple

/cashes $3 billion check

"Well, yeah... ya kinda are the product. But we ain't sellin' cheap amirite?" - also Apple

The stupidity of one post... Apple isn’t Google. Apple doesn’t pimp it’s users out.

Apple selling your search to Google says you're wrong... and in denial. Not only are you the product, but you're the high margin, highly profitable product that produces around 5% of Apple's total operating profit. So that I'm clear, and you Cali, don't get bogged down in semantics, the you in "you are the product" is the general customer and not you personally. I'm sure Cali uses DDG or some such. The general "you" and your search represents almost $3B in pure profit. No matter the mental gymnastics you, Cali, employ there's no honest way to avoid the fact that you are a product. A commodity to be sold to the highest bidder. Google is that bidder. When it comes up again it might be Microsoft winning that bid. Still gonna be product. Not cheap, but product nonetheless.

So what exactly was stupid in my post?

Umm, missed the point? Google = no options, Apple = default + options... your comparing apples with onions...

Who says there's no options with Google? An Android user can use whatever search engine they want.

1stntenderbits · October 30, 2017 11:37AM

Habi_tweet said:

1STnTENDERBITS said:

cali said:

1STnTENDERBITS said:

"You are not the product. " - Apple

/cashes $3 billion check

"Well, yeah... ya kinda are the product. But we ain't sellin' cheap amirite?" - also Apple

The stupidity of one post... Apple isn’t Google. Apple doesn’t pimp it’s users out.

Apple selling your search to Google says you're wrong... and in denial. Not only are you the product, but you're the high margin, highly profitable product that produces around 5% of Apple's total operating profit. So that I'm clear, and you Cali, don't get bogged down in semantics, the you in "you are the product" is the general customer and not you personally. I'm sure Cali uses DDG or some such. The general "you" and your search represents almost $3B in pure profit. No matter the mental gymnastics you, Cali, employ there's no honest way to avoid the fact that you are a product. A commodity to be sold to the highest bidder. Google is that bidder. When it comes up again it might be Microsoft winning that bid. Still gonna be product. Not cheap, but product nonetheless.

So what exactly was stupid in my post?

Umm, missed the point? Google = no options, Apple = default + options... your comparing apples with onions...

What point? Google pays Apple $3B to mine the search results of Apple customers. Google pays that much because they know the majority of people stick with the default apps and never dig into the back end to exercise options. Apple can sell that search for such a high amount because I'm pretty sure they provide the metrics that show Google that most people just go with the default. Apple customer search is a commodity. A $3B commodity. Sold to Google. Product plain and simple. There's nothing to compare here, so no apples or onions. What exactly do you think is being compared?

Google reveals higher traffic acquisition payouts, supporting claims of costlier Apple sea...

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