Apple gets a cut of search revenue from Chrome as part of secret Google deal

https://9to5mac.com/2023/02/17/google-apple-chrome-search-revenue/

by samwillis • 3 years ago

256 97 3 years ago

drcongo• 3 years ago

Haven't we known about this "secret" deal for years?

We knew Apple got paid for default iOS search to be Google but I don't think we knew Apple got paid for Google using Google search in Google Chrome on iOS.

matthewdgreen3• 3 years ago

Charging people to make a specific search engine the default for iOS search is arguably abusive of market power, but at least one could argue that it’s well-understood by consumers and competitors alike. Using that market power to demand a cut of revenue from private apps and then keeping it secret looks much worse.

gundmc• 3 years ago

The article itself says that Bloomberg reported this in 2020.

fIREpOK3• 3 years ago

Can I get paid for that too?

deanCommie• 3 years ago

“This perhaps explains why Apple has not launched a rival search engine or invested in the development of its Safari browser to the point that it could become a credible challenger to Chrome,”

I'm sorry what? On iOS, Safari is superior to Chrome in every way.

People use Chrome for the cross-platform Google account integration

threeseed• 3 years ago

I would add that on macOS as well Safari is far superior in many aspects e.g. battery life, efficiency, performance.

Also it argues that Apple takes more time to think through features rather than just blindly adding them. For example only allowing Web Push for apps installed to the phone rather than the bombarding the user.

gorbypark• 3 years ago

Yeah, I think most complaints about Safari come from web developers. I do a fair amount of web dev yet use Safari as my default browser. As a user, it's great. It seems faster and leaner and it's definitely batter for battery life. The one downside is the extension ecosystem isn't as good as Chrome, but Ad Guard works ok (not as good as uBlock Origin, but good enough) and that's really all I need.

jimrandomh• 3 years ago

On iOS, Chrome is Safari. Apple outright bans competing web browsers on its platform; what they allow is reskinned versions of Safari, which is basically a way to allow Chrome and Firefox to save face and support bookmarks-syncing, but not a genuine alternative browser.

CharlesW3• 3 years ago

That's like saying games that use Unreal Engine are basically reskins of each other. Yes, they both use WebKit, but as browsers they're quite different, and the data that Google collects when you're using Chrome is quite different than what it gets when you're using Safari.

Zigurd2• 3 years ago

This is not wrong. I use Chrome because I use a lot of other Google tools, but Safari is clearly faster, lighter, and trouble free to the extent I have used it. Chrome isn't a necessity on MacOS.

wnevets• 3 years ago

Don't forget Apple really cares about your privacy unlike that mean Google.

seydor• 3 years ago

"Give us a cut of your revenue or we will care even more about privacy"

yucky2• 3 years ago

Maybe a dumb question, but how exactly is this sort of revenue kept secret in a publicly traded company?

groffee• 3 years ago

I mean is it? We're reading about it on HN.

yucky2• 3 years ago

I didn't think I need to state the obvious, but clearly I meant "for so long". If it's been secret revenue for any length of time in a public company, that is the part I'm trying to understand.

fIREpOK3• 3 years ago

You believe everything you read?

waboremo• 3 years ago

Financial reports aren't as strict as you might believe them to be. There are many widely accepted tactics utilized to keep certain things secret or just in general to paint a better picture. You can report on a deal with another company, but not specify every detail of that deal. Nobody would ever notice unless you're doing something egregious as suddenly having a 500% increase in "Other" revenue, or in the case of this situation being specifically investigated.

Zigurd2• 3 years ago

It isn't a major part of Google's costs, nor a major part of Apple's revenue.

Subsidies from apps, while they are usually bundled apps, which Apple doesn't do, are commonplace in hardware vendors' income. For PC makers, it is a more significant part of their business model.

saagarjha2• 3 years ago

It’s like 15% of their profit, not all that small.

saagarjha2• 3 years ago

I believe Apple lumps it into one of their “other” categories that includes all sorts of other things.

kornhole2• 3 years ago

Many companies have a growing category on their income statement just called 'services'. They don't need to explain what services were bought or sold. Services is often where data deals land. I remember helping Microsoft setup a $1B contract for services with the DOD, but they wouldn't tell me any details. I can only use my imagination.

Calvin02• 3 years ago

Not specifically this but for its part Google typically bundles these under “Traffic acquisition cost”.

This is the amount of money Google pays to third parties to get traffic into its services.

siliconc0w• 3 years ago

Paying your competition not to compete, if only we had a government entity focused on limiting anticompetitive behavior.

danielmarkbruce• 3 years ago

Except that in this case Apple is a distributor. This is a pretty normal distribution agreement. Apple isn't in the search engine business, so to say they are being paid to not compete is like saying Best Buy is being paid not to compete (ie, they don't produce computers) by Lenovo.

Many distribution agreements have a clause saying the distributor can't create their own product and compete. The reason is, as a distributor, you get a lot of insight into the customers, the product, the pricing. It's completely reasonable when you consider the full value chain of a product. Further, if Apple did compete in the search engine business, many would claim they would be unfairly competing by using their dominant market position in smart phones to dominate another industry.

Competition issues are complex.

robocat• 3 years ago

So many comments on this topic assume that Google is the bad guy: that Google suggested a payment for anticompetitive reasons.

Alternatively, Apple could have forced Google to pay, as part of a money skimming exercise because Apple has Google by the balls so why not get a cut?

Without more information, it is just picking sides to speculate that Google is the bad guy and Apple is the good guy.

bengale• 3 years ago

Or paying to acquire traffic is just a business arrangement and no one needs to be “the bad guy”.

roenxi• 3 years ago

We don't need a government regulator guaranteeing Google's profits. If Apple is in a position to dictate the defaults and Google wants them to make a certain choice, then Google should have to pay. Bringing in a regulator to control how Apple chooses the default search engine is a bad idea. We've seen similar attempts in the EU trying to break Internet Explorer and it turned out to be quite impotent compared to the march of Google Chrome. Regulators are ineffective at solving this sort of thing.

Although it occurs to me that you might mean Apple should build their own search engine - which is a terrible idea. Google is really good at search engines and Apple wants their customers to have the best experience. Forcing Apple to build and promote an inferior search engine would be terrible for everyone.

marmee• 3 years ago

Very cowardly of Google, bribing Apple instead of counting on its superior product (at least up until a few years).

This is a behavior that has a long history there, the no-poach agreements with Apple, selling Pixel in an extremely limited market, etc.

This inexplicable fear in dealings with Apple means their situation is worse now when Google Search is in trouble

joemaller1• 3 years ago

how big is the secondary browser market on iOS? I can’t imagine searches on iOS-Chrome are worth very much.

theiz• 3 years ago

The assumption following this revaluation is that this is an incentive for Apple to keep this secondary market as small as possible. A google search in ios safari means a revenue for Apple. Another browser does not. With this, there is a double vendor lock-in.

bagacrap• 3 years ago

Yeah this sounds like Apple shaking down Google for additional revenue, rather than Google somehow sidestepping competition. Google is paying for the privilege of being able to compete in the browser space on iOS, because if they didn't, Apple would find some reason to ban Chrome from the platform.

I'm thinking Satya is pretty jealous of this arrangement. Recent comments of his suggest that he thinks Google should be paying Microsoft every time a Windows user searches on Google.

fshbbdssbbgdd2• 3 years ago

I'm thinking Satya is pretty jealous of this arrangement. Recent comments of his suggest that he thinks Google should be paying Microsoft every time a Windows user searches on Google.

I don’t doubt Satya feels that way, but for the situation to really be analogous, Google would need to be the default search on Windows instead of Bing. Google has to deal with Apple because Google wants to be the default on the iPhone.

photonbeam• 3 years ago

Ah, captive audience mindset, not tool-provider mindset :/

This is short term thinking

grujicd• 3 years ago

If you're not entirely on Apple ecosystem, secondary browser is the way to go to share bookmarks, history, etc. For example I'm using iPads since the first version came out, but otherwise I'm on Windows/Android. Also plenty of people around here own combination of iPhone and Windows. That said, I don't know how many of them know or care about non-default browsers.

whstl• 3 years ago

(EDIT) I was talking about a different deal here. I originally assumed this was the Google/Safari deal.

It is interesting, however, to see the amounts:

2007, 25 million: https://daringfireball.net/2007/06/wwdc_2007_keynote

2009, 82 million: https://techcrunch.com/2013/02/12/google-to-pay-apple-1-bill... (sorry couldn't find the original article)

2013, 1 billion: https://techcrunch.com/2013/02/12/google-to-pay-apple-1-bill... (same as above)

2015, 1 billion: https://searchengineland.com/prediction-apple-will-not-renew...

2016, 1 billion: https://www.macworld.com/article/227243/report-google-is-the... and https://www.theguardian.com/technology/2016/jan/22/google-pa...

2017, 3 billion: https://www.searchenginejournal.com/google-paying-apple-3-bi...

2018, 9 billion: https://searchengineland.com/report-google-to-pay-apple-9-bi...

2018, 12 billion: https://fortune.com/2018/09/29/google-apple-safari-search-en...

2019, 9 billion: https://appleinsider.com/articles/19/02/12/apple-may-have-be...

2020: https://www.bloomberg.com/news/articles/2020-11-24/deals-wit...

CharlesW3• 3 years ago

Those stories are about what Google pays Apple to be the default Safari search engine.

This new claim is that Google pays Apple cut of search revenue, in addition to that.

samwillis• 3 years ago

Even more specifically this is a report that they pay a cut of advertising revenue for searches performed via Chrome on iOS, as in not Safari.

Yes the Safari deal has been well known, but Chrome deal was not known and raises questions.

kornhole2• 3 years ago

The ostensible agreement is just to be the default search engine. Estimates this year for pay out is ~$20B. Now that we know that it is also based on actual searches, we are safe to assume they are passing other data too.

zerr• 3 years ago

How does Apple verify that the correct amount is paid? Do they audit Google's search finances?

worldsavior2• 3 years ago

I guess it's legal, and you don't mess with legal. Or maybe they have a guy who verifies it without involving anyone else.

navigate8310• 3 years ago

If they mess with legal and go to tribunals to settle, wouldn't that attract unwanted attention?

fshbbdssbbgdd2• 3 years ago

“Guy who verifies” sounds pretty plausible to me. With both companies having tens of thousands of employees within miles of each other, and many who have worked at both, and get drunk together, it would be pretty hard to keep everyone involved from noticing if the numbers didn’t match up.

slavboj• 3 years ago

You build the possibility of undercounting into your pricing.

numair• 3 years ago

Sorry, I don’t buy it. I think the redacted product is Siri, and the author’s dismissal of this possibility shows how people underestimate the number of voice searches conducted using that service. As far as I know, it is the world’s most-used “AI service.”

crazygringo• 3 years ago

I took a look at the PDF linked from the Register article but sadly the term is replaced with an icon in reflowed text, rather than a black bar, so you can't judge the width of it to tell which term is more likely.

I agree Siri would make sense, but on the other hand I can't imagine any reason Siri would be redacted.

st3fan2• 3 years ago

Most business deals are secret. Why is it so special that this deal needs to be called out as secret?

urbandw311er• 3 years ago

The article has also been edited to acknowledge that the business deal was already reported on 3 years ago. Some secret.

fIREpOK3• 3 years ago

Maybe because they try to make it look like they care about privacy?

testTED2• 3 years ago

As does Mozilla, another large recipient of $ from GOOG.

umeshunni• 3 years ago

Because it drives clicks

zahma• 3 years ago

Because it’s hypocritical. Apple’s marketing tries to cast its products as pro-privacy, and this would suggest that they are willing to give yours up for the right price. The secrecy part is icing on the cake. Privacy exists for them but not for you.

st3fan2• 3 years ago

How does using Google search on WebKit with its Intelligent Tracking Protection compromise your privacy?

renewiltord• 3 years ago

This is going to be wild for many of you to hear, but Google gets a cut of my phone plan as part of a secret deal I have with them for phone service.

lencastre• 3 years ago

Was this really a secret? Or more like an open secret?

They are codependent in a way and AAPL seems to have the upper hand, currently.

Nevermark• 3 years ago

Given Apple heavily taxes their App ecosystem, even for transactions which incur no direct cost to Apple, nobody can know how many opportunities that don’t occur to Apple to pursue - that would have, if they had to compete for those dollars with actual offerings of their own.

Not as strongly anti-competitive as not competing with a giant, but an angle on the App Store transaction tax that had not occurred to me before.

scotty796• 3 years ago

Should publicly traded companies be allowed to have secret deals?

carlosjobim• 3 years ago

Of course yes.

scotty796• 3 years ago

I think not. We should have more transparency in the economy. Money of the stock market is a nice carrot. It already forces companies to be more transparent. I think we should bump up the transparency requirements.

muraiki• 3 years ago

Flagged because this "secret" has been known since 2020 (the article has been updated to state this but kept the clickbait title)

Apple gets a cut of search revenue from Chrome as part of secret Google deal

Related Stories