Apple has most of the elements it needs to create its own search engine

Apple could make its own search engine and end its reliance on Google, a report points out, with Apple already possessing most of the components it needs to go it alone.

Using Google for search has been lucrative for Apple, with the search giant paying Apple billions to be the top search option in iOS. But while the arrangement being discussed in court is beneficial to Apple, there's always a possibility of it deciding to go its own way.

In Sunday's "Power On" newsletter for Bloomberg, Mark Gurman reasons that Apple could create its own search engine and create an Apple Watch-sized revenue stream with the sale of advertising. One that is a "long shot" from actually happening due to how the incentives of the Apple-Google deal line up, despite repeated rumors on the topic.

A person involved with the deal explained that the alignment of incentives was a big part of its creation, since while Apple could promote rival searches, it at least earns by steering customers to Google.

However, Apple could earn more revenue than the Google deal by bringing search in-house. This possibility has helped Apple push to work on its own search technology, which helps on-device services but not web search.

Going it alone

In the what-if scenario, Gurman proposes Apple could offer a more integrated and private solution than Google. This is already evident in search engines made for services like the App Store and Maps.

Apple has also been working on a next-gen search engine for apps codenamed "Pegasus" under former Google executive John Giannandrea over the last few years. That will apparently arrive on apps like the App Store soon, offering more accurate search results.

Another piece of evidence is Spotlight, which does rely on Bing and Google for search results, which may get more improvements through generative AI tools.

The Applebot web crawler is also an important element, since it scours the Internet for websites similar to Microsoft and Google's versions. Then there's the advertising technology team that could eventually create an advertising group for web search.

It is reasoned that comments from Apple SVP of Services Eddy Cue saying Google's search is the best and that Apple has no incentive to make its own are probably true, but could also be a measure to try and protect Google from government enforcement. If the US believes Google violated antitrust laws, the existing billion-dollar search deal could go up in smoke.

Google therefore remains Apple's best option, at least until Apple believes it has made a better one.

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34 Comments

avon b7 7719 comments · 20 Years

About 7 months ago

lmasanti said:

First thing first… we need to acknoledge that it is a… ‘no news week’… so Gruman… and also Kuo… need to ‘fill’ their sites with… anything,

This quote is funny: “However, Apple could earn more revenue than the Google deal by bringing search in-”

You know… Apple knows nothing about ‘doing business’… so Gruman cleverly notes that they are wrong if they do not make their own search engine.

I just remember two quotes… I think both from Steve Jobs…:
“We are proud as much of what we have done as of what we have not done!”
“We like to enter a market when we can change it!“

So… why should Apple enter the search market for… selling ads?
Do we remember the iAds idea?

Do we remember the “TV as a hobby” until they develop Apple TV+?
But people keep ‘telling’ Apple to buy Disney, Netflix, ESPN, ABC…

Maybe… Apple is a trillion valued company… by not following bloggers and journalists' ideas.

It's important to not forget how Google got going at the outset.

For every search you made through Google, Google was earning revenues by just presenting the results page to you with two or three clearly marked promoted links. You didn't have to click on any of them for Google to get the revenue. That remains of course but a lot more has been added and interwoven into it since.

At the very least, Apple now has enough users to make regular search a viable and very profitable option. That would earn them revenue, increase competition and potentially take customers away from Google.

Of course, it's no wonder Google got where it got today because it's search infrastructure, algorithms included, is class leading.

However, you don't have to beat Google at its own game. You just have to be good enough and know how to market the functionality.

IMO, the current Apple - Google 'agreement' is basically a scheme to stifle competition and share the rewards.

red oak 1090 comments · 13 Years

About 7 months ago

Wearables revenue is about $35 billion per year. Google Search gross revenue is $162 billion/year

So, that would be 21% of Google’s total search revenue. Seems low but not outlandish. I bet it is closer to 30-35% and growing every year

Apple continuing to build internal expertise and launch internally build search features is key to having leverage over Google in negotiations. It is fundamental

twolf2919 112 comments · 2 Years

About 7 months ago

avon b7 said:
…

Apple may have enough users, but what evidence do you or Gurman have to support the view that they could be more profitable with their own search engine than the deal they have with Google? Creating, enhancing, and maintaining a search engine isn’t free. Then there’s the fact that Apple prides itself on maintaining privacy of its users, so any advertising they sell won’t be as profitable as Google’s as those ads won’t be as “targeted” as privacy violating as Google can make them.

I think the OP is right - it must be a slow news day. There’s no way Apple will do their own search engine - unless it was forbidden to sell the integration with one to the highest bidder - currently Google - under some sort of anti-trust decree.