> It is hard to believe that this payment is just for being the default search engine. I strongly suspect that Apple also agrees to not build their own search engine as long as this deal is on

In practical terms, if Apple launched a search engine that wasn’t the default, would it see much uptake? It seems to me that Google don’t need an agreement for that.

This is Apple we’re talking about. That search engine would be a skunkworks project for several years and rapidly become the default soon after release.

Presumably, what Google gets out of this is the assurance that no such skunkworks project exists.

I'm assuming the agreement would not cover skunkworks projects as this would be clearly deemed anti-competitive (collusion) if that deal ever saw the light of day. Even a deal of not launching a product might be deemed as such. But I assume you can't really launch a search engine without a couple of years of user feedback, i.e. tracking what links get clicked and which not, to influence the ranking. And that would require an official launch from Apple, which would probably result in Google to terminate the agreement immediately on launch (even if it is not made the default search engine). So even without written/verbal agreement in that field, Apple knows that the minute they publicly launch a search engine, the deal is off. I think such a deal would fall into the tacit collusion category [0].

[0]: https://en.wikipedia.org/wiki/Tacit_collusion

The FAANGs did obviously illegal collision on hiring before. Don't see why they wouldn't do so on other stuff. Probably have learned their lesson to not E-mail about it too.

Apple has a search engine. It powers Safari Suggestions, Siri etc and it is enabled by default.

I imagine close to ~95% of all iOS/OSX searches would likely be hitting those services if you look at the way the UI is implemented.

No, but building a search engine doesn't happen overnight. They could launch it, and after 2-3 years of user feedback and testing, make the default configuration switch and cancelling the contract with Google.

I think it's very possible that the payment is just for being the default search engine. Because one alternative is that Apple picks another company to be the default search engine. And suddenly Google has lost the most affluent group of consumers and has gained a major competitor. They would pay almost any amount to prevent that from happening.

I don't think Apple would want to make itself the default. That would just invite all kinds of regulatory scrutiny, and would conflict with their pro privacy image. Why bother when they can squeeze Google and get paid billions with no work?

> I don't think Apple would want to make itself the default. That would just invite all kinds of regulatory scrutiny

Doesn't seem to have stopped Google with Android.

> would conflict with their pro privacy image.

How so? I'd argue that it would enhance it, because they could advertise that the default AppleSearch protects your privacy better than Google.

To add, I can see them arguing in court "Hey, if someone offers us say $21 billion, we'll start an auction between them and Google to see who offers us more. Obviously being the default search on iOS is worth billions."

> I don't think Apple would want to make itself the default. That would just invite all kinds of regulatory scrutiny, and would conflict with their pro privacy image.

They did it for other markets where they do compete - maps most notably.

Maps was different, I believe. Google wanted substantial concessions from Apple for them to continue using Google Maps (and to build out new features like turn-by-turn navigation), Apple balked, and Apple Maps was born.

My understanding was this happened during contract renewal for Apple's access to Google Maps and YouTube. This was back when Apple wrote the apps and had them preinstalled.

For Maps specifically, Google wanted Apple to

- push users to log into their Google account

- sharing location data upstream to Google

Supposedly, Google had withheld new feature access from Apple until they got location data reported upstream - turn by turn and vector tiles in particular hurt, as their absence made maps have a limited feature set and use significantly more bandwidth.

The buzz at the time made it sound like Google was still in negotiations when Apple announced at WWDC that they would be using their own maps. They were pretty much blindsided - one of the reasons it took a while before a Google Maps app actually launched for iOS.

Apple likely just decided to launch the product early. The quality of that early launch and how it was handled publicly (along with other internal disputes) is supposedly why Forstall was shown the door.

The first part of what you said lines up with my memories of that era. As for the negotiations, the scuttlebutt at the time was that Apple was worried negotiations with Google would break down, as tensions were already rising between the two, since there was some animosity over Eric Schmidt possibly using his knowledge of Apple's product roadmap (he was a member of Apple's board at the time) to help Android. Since the contract ended at the end of the calendar year, it would potentially leave Apple with a non-functional maps app; since Apple didn't (and still doesn't, although they're getting better about this) like to ship big feature updates outside of major OS releases, it was either release their own mapping service before it was fully-cooked or give in to Google's demands.

Where is that [0] reference?

Because it is not $20B, but $10 / $12B. The range was partly confirmed during a trial where Google mentioned their percentage of profits paying to Apple as being default search engine.

Sorry, my bad I forgot to add the [0] reference: https://www.macrumors.com/2021/08/27/google-could-pay-apple-...

(repeating that this is an analyst estimate/rumour so take it with a grain of salt).

Thanks to analyst and Macrumors continue to pump out and report BS the internet has never educated people on any issues. Although I dont doubt this could be the usual Apple PR play when they intend to negotiate a new deal with Google. As they have done so in the past 5-10 years with Qualcomm, Broadcom, Google, Intel etc.

To add some useful information to HN readers, Google has been paying roughly $10 per user to Apple for the past 8 years. So the growth of Google Default Search Engine placement has been growing steadily with Apple's active user. This exclude regions which does not use Google as Default Search Engine.

Unless there are dramatic changes in Google traffic accusation cost in their Quarterly report or going to make a change in 2022 ( Which I am not aware of ), that rumour is completely baseless.

Well the $12-10Bn are confirmed due to court documents, so assuming it grew in 2022 is not that wrong. What are a couple of billions here and there anyway :)

It’s proportional to Google ad revenue, which has grown a lot since 2020

If I remember correctly the notion of Google Sharing Ad revenue with Apple came from Oracle in a trial and was never proven. Not to mention the number dont add up from 2014 - 2019. We will see how this play out once we have Google's number from quarterly report.

https://www.cnbc.com/2021/05/18/how-does-google-make-money-a...:

“Search is Google’s most lucrative unit. In 2020, the company generated $104 billion in “search and other” revenues”

iOS users reportedly are bringing in above average ad revenues. So, I do not rule out they’re worth $30 billion of that. If so, “up to $20 billion” could be a reasonable deal for Google. It still brings in loads of memory and deprives the competition (e.g. Microsoft) from those valuable ad targets.

If that really is $20 billion, it also seems Google is willing to give Apple a cut of over (or at least about) 30% of the revenues they make on iOS, though. Would that make an argument for Apple in their disputes over their 30% cut on app revenues?

> $20B. It is hard to believe that this payment is just for being the default search engine.

Well ask yourself what the value of this placement is? Google earns about $200 per user, mostly in ad revenue. If Google search wasn't default, they'd probably lose half the users.

There are 1 billion iPhone users. At $200 each, Google stands to loose $200b. So a price tag of $20b to keep that...

Are you sure that 200 usd is worldwide? Seems like US only

At 10 cents per ad print, that’s only 2000 impressions, around 6 per day. Certainly sounds in the higher side of feasible. If the deal is for $20B, break even is a tenth that though, so there’s a lot of margin for error while still claiming enormous financial benefits.

> 10 cents per ad print

Source?

It's a number that I thought should be in about the right ballpark. The point wasn't to be on the mark, it was to be explicit enough about the estimate that would be easy for somebody to correct me if it was wrong. Which, it turns out, I was: looking around some more, it's closer to 1c per impression. That said, it's still easily in the ballpark of what would be a net positive.

The number is higher in the US and lower in the rest of the world. But iPhones are more heavily skewed to US users. I picked $200 as a good ballpark.

True, and iPhones are also more common in wealthier people. Worked on a Project once where our target audience was medical doctors in Germany, and we had >50% iOS users on based our user-agent metrics.

Curious how you accurately got that figure knowing how draconic Germans are on protecting their privacy, I highly doubt they're cool with knowing that as doctors they're being tracked for some app targeting.

But yeah, anecdotally, just from visiting their practices, I also noticed most doctors in Austria tend to be in the Apple ecosystem for private use, but their practices and the clinics tend to be Windows.

Collecting the user agent string is one of the most basic forms of web analytics. It doesn't necessarily have anything to do with "targeting" or violating privacy in any way, so it's strange that you brought it up in such a way.