Roger Fingas
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.
Charles Martin
Malcolm Owen
William Gallagher
Christine McKee
Wesley Hilliard
18 Comments
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.
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 always change the default to DuckDuckGo anyway, so...
Apple should acquire DuckDuckGo and make that the default search engine. It works fine.