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A Goldman Sachs analyst estimates that Google will pay Apple $9 billion in 2018, and $12 billion in 2019 in order to remain the default search engine on the iPhone's Safari web browser:
Google pays Apple so that it remains the default search engine on the iPhone's Safari browser. Although neither Google nor Apple discuss the terms of the agreement, most analysts believe the payments are billions of dollars per year. In fact, the so-called "traffic acquisition cost" payments may be bigger than anyone on Wall Street thinks, Goldman Sachs analyst Rod Hall wrote in a note distributed to clients on Friday.
Google could pay Apple $9 billion in 2018, and $12 billion in 2019, according to the Goldman estimate.
"We believe this revenue is charged ratably based on the number of searches that users on Apple's platform originate from Siri or within the Safari browser," Hall wrote. "We believe Apple is one of the biggest channels of traffic acquisition for Google," he continued.
Goldman's report models Google's payments to Apple as a fraction of the money it makes on iOS through paid searches, and worked backwards from iOS market share, added a premium, and used a rate based on previous Google disclosures.
[...] In 2017, Bernstein analyst Toni Sacconaghi estimated that Google was paying Apple $3 billion per year. The only hard number we know for sure is that Google paid Apple $1 billion in 2014, thanks to court filings.
Also at Search Engine Land and BGR.
See also: At $12.85 per iPhone, Google's default search payment is probably a steal
Apple Looks Down on Ads But Takes Billions From Google
And if Goldman's $9 billion figure is close to correct, it also undermines Apple's opposition to digital advertising businesses. Tim Cook, Apple's CEO, is happy to tell anyone who will listen that his company is morally superior to those grubby companies such as Google and Facebook Inc. that make their money from harvesting people's digital data trails and using that information to target ads to every man, woman and infant.
(Score: 3, Interesting) by takyon on Sunday September 30 2018, @01:34PM
It looks like not a lot of people are changing their default search engine if Google is willing to toss around billions of dollars per year to prevent Apple from creating its own Google clone or switching to Bing. That or iOS users are very susceptible to Google's advertisements.
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