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Apple's Deal With Google for iPhone Search Pegged at Over $100 Million Per Year

Silicon Alley Insider reports on information from a source claiming that rumors of Apple looking to develop its own search engine are untrue and that Apple's current deal with Google to provide default search functionality for the iPhone is currently worth over $100 million per year to Apple in revenue sharing.

Our source tells us "there's too many options" for search on the market, so there's no reason for Apple to build its own search engine.

Another reason Apple might not want to build its own search engine: It's getting over $100 million a year from Google in its revenue share deal, according to our source.

For Apple, that's not a lot of money. But, it's enough that it doesn't make sense for Apple to put considerable resources towards building its own Internet search engine. And, if Apple wanted more money or options, there's Microsoft -- with Bing and a big checkbook.

A report from BusinessWeek last month had in fact claimed that Apple and Microsoft have been in talks to make Bing the default search provider for the iPhone as the relationship between Google and Apple has reportedly soured as competition between the two companies has become increasingly intense.

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26 months ago
Like the relationship with microsoft and apple is any better? Bing isn't that good.
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26 months ago
What's a $100M when there's a stash of close to $40B on the books? The competition between Apple and Google will intensify moving forward. I wouldn't discount Apple creating a "search" business over the long-term.
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26 months ago
Makes sense.

I wish someone else would come up with a search engine to compete with google though. The way google treats its business partners sucks. So I would like someone to really give them a run for their money. Even with Yahoo and Bing essentially coming together this year it is still not a formidable challenge to Google.

That being said, I can believe they are making that much money off searches from their products, and that is a nice add on for the revenue.

I think having google search on an iPad will even be more worthwhile as Google can better display the ads.
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26 months ago
Maybe they should invest $100 million a year in developing their own search engine. :D
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26 months ago
I still think that all this Google / Apple hate talk is crap. They were in love with each other less than half a year ago. Then the feds started investigating their boards. It's all manufactured to make it look like there isn't anything shady going on. They still have a great relationship, I'm sure. Maybe not as great as it used to be, but still pretty solid I'll bet.

Bing on iPhone? Seriously? I really doubted this when it was first rumored, and I wasn't surprised when it never came to pass. I guess there is still the OS 4.0 event next month, but come on, that's extremely unlikely. Steve Jobs holds grudges and Microsoft is a HUGE offender. Way more than Google, though Google is more recent.
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26 months ago
iSherlock for the web. :)
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26 months ago

Like the relationship with microsoft and apple is any better? Bing isn't that good.


Apple does like to keep an Ace up its sleeve.

Just as they kept an Intel Version of OS X for years along with the Power PC version in case PowerPC chips were lagging then Apple could quickly switch to Intel.
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26 months ago

What's a $100M when there's a stash of close to $40B on the books? The competition between Apple and Google will intensify moving forward. I wouldn't discount Apple creating a "search" business over the long-term.


You're kidding right? Those $100 million a year would give Apple more incentives to take bigger risks without taking money out of the banks for it. Apple would be more willing to "waste" $100m a year in research and development than to lose it forever. There's a big difference.

It doesn't make sense for Apple to go into the search business at all. Apple is at this moment, crappy at offering web solutions. MobileMe is slow, no reason for it to be slow when they have huge money to invest into infrastructure (other than that $1 billion data center in NC, but 1 data center in US isn't enough). iWork is horribly limited and hasn't been changed in over a year. What other web solutions do they have that's successful?
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26 months ago



It's getting over $100 million a year from Google ... For Apple, that's not a lot of money.


Really? $100M is not a lot of money? Compared to what?

In that case, I suppose $1M is nothing at all, so I'll be happy to provide my account and routing number to Apple's financial people... Deposits are accepted without the need for prior notice.
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26 months ago
I truly hope these two companies can work together going forward. This posturing over the mobile phone market is nothing more than destructive.

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