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  • Yahoo Wants to Save Google a Billion Dollars!

    April 18th, 2014

    According to published reports, Apple gets approximately one billion dollars a year from Google to be the default iOS search engine for Safari. In turn, Google probably gets more than that in payment for targeted ad clicks or taps from an iOS device.

    All this is happening while Apple is fighting the largest licensee of Google's Android OS, Samsung, in the courts over intellectual property disputes.

    But Google isn't the only search engine available on iOS. You can choose Microsoft Bing, or Yahoo if you prefer. But since most users don't change default settings, Google continues to get the lion's share of the action, and that's also true on OS X.

    Despite that, Apple has done things to reduce the ad payments to Google, first by giving up on Google Maps starting in iOS 6, although Google's app is still available for download, and by moving to Bing for some Siri-related searches. Yahoo already provides the data for stocks and weather on iOS, but they want the whole enchilada.

    According to published reports, Yahoo CEO Marissa Mayer is hot after getting that pole position on iOS. Persuading Apple to make Yahoo the default search engine is supposed to be part of a major initiative by Mayer, who has reportedly made contact with Apple executives, including head designer Jonathan Ive, about what it would take to elevate Yahoo's status and consign Google to a lower position.

    If such a deal is made, and reports so far apparently come from sources within Yahoo, it would still depend on what arrangements Apple has made with Google about putting its search at the top of the list. Is it a multiyear contract, or renewed annually?

    But if a deal could be made quickly, it would take nothing but a simple iOS update to make it happen, although I would expect it would require some sort of advance notice so iPhone and iPad users would be warned about the change. It wouldn't make sense to change a search engine from Google or Bing to Yahoo without getting a customer's approval.

    So if it happens, maybe it'll become part of iOS 8, and perhaps Apple could make a big deal of it so customers are appropriately alerted before things change about the new state of affairs.

    If Apple is indeed getting one billion dollars in annual payments from Google, would Yahoo have to pay twice that to take over? Would Apple go back and forth among Google, Microsoft and Yahoo to get the best deal before considering such a change?

    Now it's quite true that Yahoo, although the company's fortunes have been better of late, still isn't doing stellar business as a search engine. These days, Yahoo search is actually powered by Microsoft Bing, but the combined market share of the two is dwarfed by Google, which remains the market leader without evidence of anything but minor market share changes in recent years.

    Considering the search market, Apple might decide to go with the flow, although they clearly didn't take that approach when it came to mapping. It's not that Apple would care about saving Google a billion dollars in annual payments either, since that's chump change to the company. But if customers are accustomed to Google powering search, it may be difficult to persuade them to change, although switching the default will still accomplish that for the majority who never change defaults.

    But I wonder: Why haven't Microsoft and Yahoo made efforts to convince iOS users to change their default search engine? It takes seconds to do. Tap Settings>Safari>Search Engine and choose the one you want. I use Bing these days, though I sometimes switch back to Google because I've grown accustomed to the results it presents.

    So would it make sense for Google's competitors to buy ads in Apple-related publications and sites to promote the choice of a different search engine? Microsoft has spent loads of cash touting Bing on TV, but these are the sort of ads that probably don't have much of an impact. Most customers don't consider the choice of search engine, particularly since Google has become the verb that equates with search.

    So maybe a promotional campaign will be difficult to pull off, though I would think it would cost less than lobbying to get the default position. Then again, I don't think Apple would be too sad to see Google get second-grade treatment on iOS, so perhaps these rumors about Yahoo taking over may indeed have some substance after all.

    It's not that Apple would necessarily comment, but iOS 8 is under development as we speak, and a change of that sort may already be under consideration. But even if Yahoo becomes the default search engine, it's not that Google disappears. But I wonder, if this happens, whether a similar change would be contemplated for OS X. At the end of the day, however, if Apple feels customers expect Google search to be at the top of the heap, things may not change. Indeed, such a move may be considered one of spite, since Apple remains upset with Google over Android.

    It's also very possible that this is just Yahoo's trial balloon, and that nothing will come of it, although it certainly got plenty of media attention didn't it?



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    4 Responses to “Yahoo Wants to Save Google a Billion Dollars!”

    1. Peter says:

      Apple might decide to go with the flow, although they clearly didn't take that approach when it came to mapping.

      And how'd that work out for them...?

      Gene Steinberg Reply:

      @Peter, Rough at the start. But it's fine now.

      Peace,
      Gene

    2. Paul Robinson says:

      Yahoo's search on the iPhone and iPads doesn't have a search by time frame--e.g., by week, month, quarter (Google lacks that, too), year, or custom range.

      Without that, it's a second-rate search engine.

      They need to add that, and to one-up Google make it a one tap choice rather than Google's multi-step tap sequence! We'd switch in a heartbeat (the human kind, not the SSL kind!)

    3. Jase says:

      Apple should build its own search engine and make it the default search on Safari, just as Apple built their own Maps App. They would instantly grab a considerable share of internet search, just as they have grabbed a large share of Map searches through their Maps App on iOS, and as they are attempting to do in the streaming music sector with iTunes Radio. They bought Topsy last year, which has quite a bit of search capability and technology, and I bet that there are other small companies with good technology that Apple could use. They could also buy an existing search engine, such as DuckDuckGo or even Yahoo.

      Google is using the cash flow that they get from their hegemonic control of search advertising revenue to fund direct competitors to Apple's core businesses, such as Android OS phones and tablets, and even Chrome OS, which one day may develop into a direct competitor to Apple PCs and tablets. It is not good strategy to cede Google the default search engine business on iOS and OS X, when Google is attempting to eat Apple's lunch in Apple's core businesses.

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