We’ve always had an idea that Google paid Apple an obscene amount of money to make its search engine the default search engine of choice for all iDevices. According to Morgan Stanley analyst Scott Devitt, Google pays Apple $1 billion for the right to be its default search engine, with that cost only to go up in the years ahead.
This is a lot of money, but in the grand scheme of things it makes all the sense in the world for Google to pay the hefty fee. Whether you love or hate Apple, there’s no doubt that the tech giant’s iPhone, iPod Touch, and iPad is still the most dominant devices on the market. Besides, Devitt explains that Google and Apple only have a “per-device” deal rather than a revenue sharing deal. When you break the numbers down, Apple takes in 75 cent from every $1 Google pockets from ads on all iDevices up front.
In the end, Google doesn’t care about the money because it makes more than enough of it to go around. The sad truth is Google hardly makes any money off its own Android mobile operating system when it could be bringing in much more. The reality is, search with ads is Google’s bread and butter, so the company won’t hesitate to go above and beyond to expand its search visibility.
Apple would love nothing better than to stick it to Google like it tried to do by dropping Google Maps in-favor of its own Maps app. But the company will not jeopardize pissing off its customers once again.
[BusinessInsider; via Cult of Mac]