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Google Paid $1 Billion To Keep Search On iPhone (bloomberg.com)

Posted by Soulskill on from the all-about-the-benjamins dept.

phantomfive writes: As the Google v. Oracle copyright case drags on, Oracle is claiming that Android has generated $31 billion in revenue for Google, $22 billion of which was profit. Court records also show Google paid Apple $1 billion USD to keep their search bar on the iPhone. A revenue sharing agreement was in place as well. At one point, Apple got 34% of the revenue generated by Google searches on iPhones. Both companies later requested that the information be redacted from the record, but once something is released on the internet, it tends to stay there.

54 of 77 comments (clear)

  1. Capitalism by The-Ixian · · Score: 4, Informative

    Company makes money and colludes with competitor to make more money.

    Nothing to see here; Working as intended.

    --
    My eyes reflect the stars and a smile lights up my face.
    1. Re:Capitalism by Hylandr · · Score: 2

      I don't see Google and Apple being competitors anymore than a Giraffe is a competitor to a Beaver.

      Totally different beasts imho.

      --
      ~ People that think they are better than anyone else for any reason are the cause of all the strife in the world.
    2. Re:Capitalism by oh_my_080980980 · · Score: 1

      Really? Then why all the secrecy over the agreement...Sorry Potsy it is a big deal. It points out that business are making money off your property and you are not being compensated for it. True capitalism would pay you for your property.

    3. Re:Capitalism by pr0fessor · · Score: 1

      They are not making money off your property... installing their search makes them no money, you using it on the other hand allows them to make money off of you even if indirectly.

      The problem they have isn't that people know they have a deal with apple but that putting the details of that deal out make it harder to negotiate with others. We want the same deal apple has... when you make sales like apple you can make those demands until then... not so much.

    4. Re:Capitalism by UnknowingFool · · Score: 1

      Because companies don't have to disclose every business deal they have to you. How much do you pay your barber or plumber or gardener? Why haven't you disclosed it before? What do you have to hide?

      --
      Well, there's spam egg sausage and spam, that's not got much spam in it.
    5. Re:Capitalism by Junta · · Score: 2

      They both want to do an ad network, they both sell music and mobile apps, they both provide mobile operating systems, they both push their platform for laptops. Apple felt compelled to release Apple Maps to reduce reliance on Google maps....

      Apple has not yet tried to get into Google's first business (internet search), but it seems only because Google pays them not to try.

      --
      XML is like violence. If it doesn't solve the problem, use more.
    6. Re:Capitalism by dugancent · · Score: 2

      Apple is ending their ad network, iAds.

      --
      SJWs are the new boogeyman. -Me
    7. Re:Capitalism by ripvlan · · Score: 1

      The number seems reasonable. Normally the person who owns the channel looks for a 60/40 split. Google has nothing without Apple's participation. As the article states it isn't clear who gets the 34%

      As for Oracle and the Java API. I wouldn't expect the same financial split. Google should probably pay a "developer license" for Java - but not based on revenue sharing. Java embedded has a per-device license fee (http://www.oracle.com/us/corporate/pricing/price-lists/java-embedded-price-list-1977272.pdf) - fixed per unit. Although lots of units usually gets a discount. So going off and writing your own Java doesn't seem fair - and I think Google lost (or is losing) that battle.

      Up next - MobileGo!

    8. Re:Capitalism by Wrath0fb0b · · Score: 1

      Even if, in general, Apple and Google are competitors in many sectors, they certainly aren't here because Apple doesn't have a competing search product. Of course, when you search on the iPhone is has to go somewhere (Bing? Yahoo!) and those queries are worth money, so it's good sense to come to a revenue-sharing arrangement. That's not collusion or conspiracy, it's just a regular business deal for something of value that another party cannot produce on their own.

      By comparison, Apple cannot fab their own SOCs so they buy them from Samsung, for billions of dollars yearly. Those two are also competitors (and legal adversaries) in many sectors distinct from chip supply. That's not "collusion" either -- it's the fact that a large business has many interests and generally can keep them separated so each part of the company can function.

    9. Re:Capitalism by NatasRevol · · Score: 1

      Siri uses bing for search.

      I wonder how much Microsoft pays for that.

      Or if Apple does it to reduce the reliance on Google.

      --
      There are two types of people in the world: Those who crave closure
    10. Re:Capitalism by jellomizer · · Score: 4, Informative

      Well Google vs Apple vs Microsoft vs Oracle vs Samsung...
      Big companies that do a lot of things have complex relationship with each other. They have particular product lines that compete with each other, then they have other product lines that complement each other, where it is in their best interest to partner. Then there are products that uses the products of the other.

      Apple uses Googles Services which may be using Oracle's products and Samsung's components...
      and
      Samsung makes a product that competes with Apple which uses Googles Product's based on Oracle's Products...

      Depending on the product they are best partners or bitter rivals. Capitalism isn't about making friends, it isn't about making enemies. It is about making choices that will benefit you the most.
       

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    11. Re:Capitalism by TheReaperD · · Score: 1

      Bad analogy. Barbers, plumbers and gardeners have published advertised rates or they don't stay in business long. This is more like how much you pay your crack dealer down the street (though even they have published advertised rates sometimes).

      --
      "Be particularly skeptical when presented with evidence confirming what you already believe." -
    12. Re:Capitalism by Khashishi · · Score: 1

      When you are as big as Apple or Google, everyone is your competitor. Even your own subsidiaries.

    13. Re:Capitalism by TheReaperD · · Score: 1

      But, a large part of the problem is that Sun, the creators and owners of Java at the time, didn't object to Google creating their own version of the API. The problem Oracle is having in court is they are trying to say that since they bought Java with Sun that they can go back to the beginning when Sun still owned Java and change their decision on how Google could use the API and charge them all the back fees from when they didn't even own the company. They may have a much better argument by saying that the terms were changed when they purchased Java and they have to pay the fees from that point forward if they wish to continue using the API as they have. But, that is not the argument Oracle is making and they don't want to make this argument as Google has moved Andriod to the Java open API that there are no license fees for so they would only be able to collect fees for a small window, not the billions Oracle wants out of Google (rumor is these anticipated billions from Google over Java was one of the only reasons they purchased Sun). That's why one of the judgements was that Google did violate copyright but, owed Oracle $0. Oracle is in a nasty uphill fight here that Ellison didn't anticipate and I hope he gets burned.

      --
      "Be particularly skeptical when presented with evidence confirming what you already believe." -
    14. Re:Capitalism by UnknowingFool · · Score: 1

      Barbers, plumbers and gardeners have published advertised rates or they don't stay in business long.

      I think there is a difference confusing quoted vs published. For example, my plumber doesn't "publish" his rates but he tells up front what it is. If he didn't like me, I'm sure his quoted rate would be higher. In the case of the OP, my point is why doesn't he disclose all his private business dealings to the world and if he doesn't, what does he have to hide?

      --
      Well, there's spam egg sausage and spam, that's not got much spam in it.
    15. Re:Capitalism by macs4all · · Score: 1

      Company makes money and colludes with competitor to make more money.

      Nothing to see here; Working as intended.

      I have a couple of questions for you: "What is the difference between a simple Agreement and 'Collusion' ?" And "How is this 'Collusion' ?"

    16. Re:Capitalism by macs4all · · Score: 3, Informative

      Apple felt compelled to release Apple Maps to reduce reliance on Google maps....

      BZZZT! WRONG!!! Thanks for playing...

      Nice revisionist history, there, buddy!

      Apple was FORCED to create Apple Maps because Google REFUSED to license their mapping API AT ANY COST to Apple for use with Apple's (then upcoming) Turn-by-Turn Navigation feature in iOS.

      In NO way did Apple WANT to go to the considerable trouble and expense to "map the planet" to the street-level; but they essentially had no choice if they wanted to provide turn-by-turn Navigation on the iPhone.

    17. Re:Capitalism by macs4all · · Score: 2

      By comparison, Apple cannot fab their own SOCs so they buy them from Samsung [informationweek.com], for billions of dollars yearly. Those two are also competitors (and legal adversaries) in many sectors distinct from chip supply. That's not "collusion" either -- it's the fact that a large business has many interests and generally can keep them separated so each part of the company can function.

      Exactly!

      In fact, Samsung just committed to a build-out of fabrication facilities costing several BILLION dollars, just to supply OLEDs for Apple.

      When companies get a large as Apple, Samsung and The-Company-Formerly-Known-As-Google, they are ALL afflicted with the corporate version of Multiple-Personality Disorder. Some parts of one company are friends with some parts of the other compan(ies), some are enemies, and some are "frienemies".

    18. Re:Capitalism by shawn2772 · · Score: 1

      I don't see Google and Apple being competitors anymore than a Giraffe is a competitor to a Beaver.

      Google and Apple compete in some markets and cooperate in others. This is normal, and healthy.

    19. Re:Capitalism by The-Ixian · · Score: 1

      The amount of money involved as well as the implied exclusion of other, competing products makes it collusion in my book.

      But again, working as intended.

      --
      My eyes reflect the stars and a smile lights up my face.
    20. Re:Capitalism by PRMan · · Score: 1

      Yep. Apple design sued Samsung for design patent infringement for $1 billion. Samsung turned around and charged them $1 billion more dollars in parts (allowed by the contract) claiming "unforeseen litigation".

      Samsung is the only one that makes a lot of these chips. Apple has to keep paying them no matter what. Apple won a VERY Pyrrhic victory.

      --
      Peter predicted that you would "deliberately forget" creation 2000 years ago...
    21. Re:Capitalism by tlhIngan · · Score: 2

      They both want to do an ad network

      Well, Apple did - they're basically abandoning iAds now.

      Probably because Google feels it's no longer necessary - remember iAds was the ONLY reason why Google was allowed to buy AdMob - the DoJ felt that Apple's iAds was a sufficient competitor in the mobile advertising space that Google's purchase of AdMob would not harm competitiveness.

      Of course, anyone who actually ran the numbers knew iAds was a joke. I don't think I even ever saw any real ads other than for apps using iAds (app developers could buy iAds for a low price). And it's hard for Apple to justify all the expense of maintaining iAds.

      There had to be more at play - perhaps Google was kicking some money towards Apple to create iAds as a "competitor" to AdMob, and Apple just took the money and didn't really bother actually doing anything with it.

    22. Re: Capitalism by Karlt1 · · Score: 1

      TSMC is also making Apple processors. Apple has been dual sourcing them for at least two years.

    23. Re:Capitalism by Dixie_Flatline · · Score: 1

      They aren't, actually. They're only ending the app portion of it. So that means that they won't advertise apps in the app store in iAd anymore. iAd will continue to limp along for no reason that most of us can understand.

      (Here's the first line of their announcement: "The iAd App Network will be discontinued as of June 30, 2016. ")

    24. Re:Capitalism by macs4all · · Score: 1

      The amount of money involved as well as the implied exclusion of other, competing products makes it collusion in my book.

      But again, working as intended.

      Listen, moron: There is no "exclusion of other competing products" going on here. You can choose among several Search Providers in iOS' mobile Safari (including DuckDuckGo). Google is just the Default. And since most people (including me) don't bother to change the setting, you get Google...

  2. I am surprised by maroberts · · Score: 2

    that Google is paying Apple at all.

    I would have thought that if iPhone didn't do Google searches there would a great disturbance in the Force, as as if millions of voices suddenly cried out in terror....

    --

    Donte Alistair Anderson Roberts - hi son!
    Karma: Chameleon

    1. Re:I am surprised by Tx · · Score: 1

      I'm surprised Apple hasn't bought a search engine of its own. Several decent search engines have fallen by the wayside in recent times, so I'm sure they could pick something up pretty cheap if they didn't want to create one from scratch. Sure, the $1 billion + 34% of search revenue from Google is nice, but presumably 100% of search/ad/data mining revenue would be even nicer.

      --
      Oh no... it's the future.
    2. Re:I am surprised by squiggleslash · · Score: 1

      Bing is as good as Google these days (largely because Google is worse than it used to be, not because Bing is particularly great.) If Apple switched over to Bing, it'd encourage a lot of people to use the service, and realize they're not missing a lot by not using Google.

      So yeah, it's worth Google paying over the odds to get Apple to make their search engine default. They would hemorrhage market share if a sizable number of people got used to an alternative.

      --
      You are not alone. This is not normal. None of this is normal.
    3. Re:I am surprised by TheRaven64 · · Score: 3, Interesting

      What percentage of users of any computer or smartphone do you think actually notice who their search provider is? These days, there are basically the small set of people that set it explicitly to DuckDuckGo and the overwhelming majority who just use whatever the default is because it's good enough.

      --
      I am TheRaven on Soylent News
    4. Re:I am surprised by ArmoredDragon · · Score: 1

      The problem is building a search engine isn't quite as simple as it once was. Nowadays, with SEO being so aggressive, you need the ability to determine what links people actually click on at your search pagen to help you figure out what is relevant. Google initially did this with search toolbars, and now they do it with chrome itself, and now they've added some JavaScript trickery.

      Apple just doesn't have the numbers to be able to effectively do any of these. Do their users spend a lot, and generate a lot of profit? Yes, but there just aren't enough of them, and they're going to have to perpetually deal with people who seek greener pastures.

      Microsoft is even struggling with this. They began tracking what links people click in IE a few years ago on Bing searches, and as of windows 10 they track you with edge no matter what search engine you use. I've also heard that windows 10 itself may be able to track your clicks even in third party browsers, though I am kind of dubious of that.

    5. Re:I am surprised by danbert8 · · Score: 2

      From Apple's perspective colluding with Google is probably the lesser evil to colluding with Microsoft... Even better if Google is willing to fork over cash.

      --
      Yes it's an anecdote! Were you expecting original research in a Slashdot comment?
    6. Re:I am surprised by Overzeetop · · Score: 4, Informative

      You know, I've heard rumors of that. As an owner of a shiny new Surface, Cortana does Bing searches by default. I can say this with no reservation: Google searches, from within my Google account (I have my personal and business domain email managed in Apps accounts)*, is hands-down superior to Bing without the associated metadata. No amount of "this is the default" search engine is going to make me use an untrained/inferior search long enough to get 10 years of searching optimized.

      *If Google isn't customizing my searches, then it's just hands down better for the stuff I'm looking for, but I'm willing to give Bing the benefit of the doubt that it sucks simply because it doesn't know my history.

      --
      Is it just my observation, or are there way too many stupid people in the world?
    7. Re:I am surprised by TrancePhreak · · Score: 1

      Apple already made Bing a part of Siri's search ability. http://searchengineland.com/ap...

      --

      -]Phreak Out[-
    8. Re:I am surprised by 93+Escort+Wagon · · Score: 5, Informative

      that Google is paying Apple at all.

      The summary sucks. The $1 billion was not a separate payment... it was Apple's cut of Google's iOS search revenue. And, also, it's apparently not defined in the testimony whether 34% was how much Apple keeps or how much Google gets to keep.

      --
      #DeleteChrome
    9. Re:I am surprised by NatasRevol · · Score: 1

      *As I said above*

      Siri uses bing for search.

      I wonder how much Microsoft pays for that.

      Or if Apple does it to reduce the reliance on Google.

      --
      There are two types of people in the world: Those who crave closure
    10. Re:I am surprised by mujadaddy · · Score: 1

      Startpage, dog. Startpage.

      --
      Populus vult decipi, ergo decipiatur...
      "Force shits upon Reason's back." - Poor Richard's Almanac
    11. Re:I am surprised by Dixie_Flatline · · Score: 1

      There have been persistent (though difficult to verify) stories that Google makes more money off of Apple users than Android users for years now. This isn't so surprising, since when it comes to purchases from mobile devices, more iOS users buy things, and they pay more per purchase on average.

      But more to the point, I don't think Apple has ever been in an open war with Google the way people often think they are.

      Google wants to be your search engine, and they want to be in your pocket. They don't care WHAT device you have, they just want to be there. As apps become the most significant way that people spend their online time, Google wants to make sure that you're still doing searches through them, even if you're not using your web browser.

      Android is partly about leverage. Without Android, Google's bargaining position is a lot weaker. They COULD decide to get up and walk away and still be pretty profitable. But Android is also about making sure that no matter your income level, Google search is available at all times.

      Apple just sells hardware--that's where all their money is. Their software is a point of differentiation, which the Android handset wars have taught us (well, reinforced for us) is the most important thing in a crowded market.

      The reality is that both these companies could walk away from the deal and not feel much pain from it. But both companies are better off with the partnership.

  3. Larry Ellison by monkeyxpress · · Score: 5, Interesting

    The real story here is that Larry Ellison is still bitching about his 'stolen' Java API.

    1. Re:Larry Ellison by oh_my_080980980 · · Score: 1

      The real story is that Apple and Google are such good business partners...

    2. Re:Larry Ellison by interval1066 · · Score: 1

      whereas Google spent almost nothing on the core technologies...

      No. Judging from the Android SDK, NDK, and Studio looks to me like they've spent plenty. The SDK is essentially its own, java-based, yes, language. All those APIs and software aren't found under a rock. Plus Studio is continually being updated. I think Google spent a pretty penny on the entire ecosystem. And we can all use it for free. For all you can say about Google, including free as in beer SDK equals more market share, its not like they killed Gosling and strong-armed Oracle into giving them Android.

      --
      Python: 'And then suddenly you have a language which says "we're all stuck with whatever the whiniest coder wants".'
    3. Re:Larry Ellison by UnknowingFool · · Score: 1

      When Sun open sourced Java and encouraged companies to use it free of charge, you can't call that "stealing" if companies took them on the offer. The problem was Orace then bought Sun and changed their minds about what could be done with Java. The last CEO of Sun, Jonathan Schwartz, did not think Google did anything wrong.

      --
      Well, there's spam egg sausage and spam, that's not got much spam in it.
    4. Re:Larry Ellison by PRMan · · Score: 1

      You can't steal open source software. That's why it is open source.

      --
      Peter predicted that you would "deliberately forget" creation 2000 years ago...
    5. Re:Larry Ellison by gnupun · · Score: 1

      So why waste time in court? Why does this court case even exist disputing over something that's free? Obviously, Oracle has some rights over Java's use.

    6. Re:Larry Ellison by phantomfive · · Score: 1

      Wouldn't you, if you thought you could make more than a billion dollars off it? Really?

      --
      "First they came for the slanderers and i said nothing."
    7. Re:Larry Ellison by UnknowingFool · · Score: 1

      Just because you can sue someone in court does not mean you have a case. I can sue you for your posts here. If I have enough money, I can keep you in court for a decade. That does not mean I ever had a case.

      --
      Well, there's spam egg sausage and spam, that's not got much spam in it.
    8. Re:Larry Ellison by ebvwfbw · · Score: 1

      Oracle/Sun spent billions on Java, whereas Google spent almost nothing on the core technologies (Android = Linux + Java) that bring in over $30 billion a year. That is stealing.

      For that kind of money Larry should be firing a lot of his incompetent java staff that keep adding band aids instead of fixing the underlying problems. That's why it's hacked over and over again, they don't fix the real problems. That's what's making it a POS.

      Maybe I sound a bit bitter... I have to deal with Oracle. Security? Ha... Should call it wonder software. If it works, it's a wonder.

  4. Lazy Apple employees by Krymzn · · Score: 1

    When Apple was looking for a search partner they should have done more than just Google it.

  5. Bit ambiguous by wonkey_monkey · · Score: 1

    Google Paid $1 Billion To Keep Search On iPhone

    Okay, I know you can kind of work it out from context (though you shouldn't have to), but at a glance it's not clear whether that's "Google have paid" or "Google have been paid."

    Still, it's possible that Apple could have paid Google to stop them blocking Google search from iPhones... I guess...

    --
    systemd is Roko's Basilisk.
    1. Re:Bit ambiguous by The-Ixian · · Score: 1

      If only there was some clarification to this point either in the article or even in the summary itself.... Oh well, I guess we'll never know the answer to this...

      --
      My eyes reflect the stars and a smile lights up my face.
  6. Re:You mean? You mean? by DrVxD · · Score: 1

    Who knew?

    I forgot, right?

    --
    Not everything that can be measured matters; Not everything that matters can be measured.
  7. Re:I wonder by interval1066 · · Score: 1

    Didn't Apple try to make their own search engine? I honestly don't remember. I remember their map effort, which went down like the Hindenburg.

    --
    Python: 'And then suddenly you have a language which says "we're all stuck with whatever the whiniest coder wants".'
  8. Do you even Apple, bro? by Anonymous Coward · · Score: 1

    Apple Maps works just fine.

  9. Re:I wonder by ChoGGi · · Score: 1

    Isn't the whole reason people first switched to google because it gave better results?

    I know I did (I'm very happy not having to use yahoo/msn/dogpile)

  10. By Default by glennrrr · · Score: 1

    And it's good that you can change this when traveling to China, as the Great Firewall prevents reliable use of Google, but Bing (at least last time I was there) worked.