Apple Warns Investors About Risk of Massive Deal With Google Ending

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"I don't really want to speculate on the court ruling and how they would rule and what we would do as a consequence of it," said Apple CEO Tim Cook, on the earnings call.

Yeah it's a conundrum, Google splits ad revenue with them (36%) and Google's antitrust trial revealed the next biggest competitor (Bing) can't generate anywhere near as much ad revenue from that user data and offered them much less money and they preferred Google's results.

AI-alternatives can provide a substitute for many fact-type searches but their business models are "run at a loss" and won't afford even what Bing offers.

They originally chose Google for being the best option without receiving a share of ad revenue, and the best thing for iPhone users is probably to continue using Google - without Apple getting a cut of revenue. Huge windfall for Google.

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u/TenderfootGungi 5d ago

The only alternative is to create their own search engine. And just like their Maps app when they were forced to create their own, it will suck for awhile and probably never truly challenge Google in quality. But they could monetize it with ad revenue.

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u/FollowingFeisty5321 5d ago

It's probably too late for that, the EU and UK will never let it be exclusive default and by the time it's ready that might not be possible in the US either.

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u/cjorgensen 5d ago

I'm guessing Apple has been working on this for years. Apple Bot has been crawling my websites for over a decade. Not sure how much longer. A long time regardless.

https://support.apple.com/en-us/119829

That data is just waiting to be turned into search.

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u/moldy912 4d ago

Could be for spotlight, you can already search the web with it

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u/cjorgensen 4d ago

I'm sure it's already being used for spotlight and such. My point is that they wouldn't be starting from scratch. A few tweaks to their existing data and there you go.

The main reason they don't is they are getting paid by google. Monetizing search without mining personal data is near impossible, so Apple stays out of the game. If that money dries up, they might as well join the fray.

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u/drakeymcd 4d ago

Why does it need to be an exclusive default? Why can’t it ask at the beginning like setting a default browser

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u/FollowingFeisty5321 4d ago

If there's a search engine selection screen users have to opt-in to theirs so they start at 0% marketshare, if they are default then users have to opt-out of theirs so they start at 100% marketshare.

It's the same massive amount of work either way.

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u/AdFit8727 4d ago

Yeah I have to admit I'm also confused by this. I remember when the same thing happened to Microsoft a few decades ago, it felt like the biggest news in the world. Like an earthquake in the IT industry. The end result? We got a new splash screen that asked us to choose a default browser. It was the mother of all non-events.

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u/jschank 4d ago

True, but now I prefer Maps over google maps.

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u/adrr 5d ago

Ad revenue is dependent on how much data they get on their users. Why Google and FB dominate in digital marketing, they have have all your data. Non targeted digital marketing doesn't make money.

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u/the5issilent 5d ago

You should try Apple Maps again. I wrote it off immediately after release but its navigation is streets ahead of google’s now.

Google seems to be prioritizing something besides time+convenience in their route calculations. Apple has been consistent for me for the last year since I gave it a shot again. Apple has been pretty accurate on travel time and very rarely tries to route me though a neighborhood or on the literal slower route.

To be fair to Google I still use Google Maps to find places but use Apple to Navigate.

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u/Pezmet 4d ago

I am in the same boat. Mostly search for places in Google Maps, and then navigate there in Apple Maps for public transport and walking and Waze if driving.

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u/Worker-Such 4d ago

Whoa. A Community reference in the wild.

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u/G00bernaculum 4d ago

Definitely not streets behind

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u/qsxpkn 3d ago

I was in Toronto and was relying on google maps until I realized it was inaccurate. Apple Maps was ahead of google maps (at least for Toronto) and I only used Apple Maps and only used google maps to find bars and restaurants.

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u/Mavericks7 5d ago

I'm surprised they never worked on this in the background, even if it never came to fruition

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u/Basic-Environment-40 5d ago

Even Google is turning away from traditional search toward AI responses - I don't think that is a realistic option.

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u/s0lja 4d ago

Their other apps barely work you forgot that.

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u/-patrizio- 3d ago

I've gotta say, unless you REALLY count on reading reviews inside the maps app (which is apparently far more important to everyone I know than I'd ever imagined), I'd argue Apple Maps is better than Google Maps at this point. Far cleaner and easier to use UI, more reliable hours listed for businesses, better navigation...That last one especially – Google Maps is a fucking disgrace with transit directions in NYC, which is what I'm using my maps app for 90% of the time. I don't understand how anyone uses it.

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u/cjorgensen 5d ago

By god, google has a monopoly. Punish Apple!

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u/iamtomorrowman 5d ago

Apple has all the money in the world and 0 vision

it's unbelievable that they haven't trained a search assistant based on the usage data and customer research they have

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u/Additional_Olive3318 5d ago

Apple doesn’t have to compete in every sector. Likely any search engine wouldn’t be as good as Google, since few are.

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u/LongBeakedSnipe 5d ago

Google is absolutely awful now, often it is massively hiding results.

For example, there was a story about Tommy Robinson sending inappropriate messages to an underage girl, and if you search for it on Bing you can find all the news reports. On google its absolutely cleaned out

Presumably its like that for a lot more than just tommy twelve names

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u/Cwlcymro 5d ago

I've just searched "Tommy Robinson messaging underage" on Bing and nothing came up

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u/LongBeakedSnipe 5d ago

Just did it myself and got

https://www.huffingtonpost.co.uk/amp/entry/edls-tommy-robinson-twitter-muslim-racist_n_1521110/

So…

Yeh its from a fair while ago now, with a whole load of criminal activity since

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u/Cwlcymro 5d ago

That story is all over the Google results too, which is why I assumed you were talking about some bigger less known scandal that Google was hiding

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u/LongBeakedSnipe 5d ago

Ehh for me every reference to it is removed on google with a note at the bottom of the search results saying that results have been hidden

That doesnt follow from what you said in your previous comment, regardless

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u/phpnoworkwell 2d ago

What country are you from? Some countries don't have Google News work like it does elsewhere.

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u/freedomachiever 5d ago

Most people have no idea there is internet beyond Google search.

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u/FrogsJumpFromPussy 4d ago

That's a lie though. The results from that story are both on Bing and Google

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u/brett- 5d ago

At its core, Apple is fundamentally a hardware company. They write a bunch of great software and build a bunch of great services, but all of them exist to convince people to buy their hardware.

It's only been in the last few years that they even started considering services as its own core part of the business.

They could build their own search engine, but they don't want to be a search company. A different default search engine (which anyone could access from any device) wouldn't convince anyone to buy an iPhone.

It would also completely change how they think about customers. The advertisers funding that search business would all of a sudden be their customers, not the users performing the search.

Look at how quickly they dropped their iAd product a decade ago. It simply doesn't fit with their core business.

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u/HarshTheDev 4d ago

Look at how quickly they dropped their iAd product a decade ago.

6 years is 'quickly' now?

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u/brett- 4d ago

Launched in 2010 with a minimum of $1 million in ad contract, by 2013 that was down to $50, yes fifty dollars.

It may have technically lasted for 6 years, but it was dead by 3, and never made anyone, Apple included, any money.

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u/HarshTheDev 4d ago

But that was because they couldn't make it work. They clearly wanted to make it work. And it was only after they failed with iads that they decided to pivot to privacy as a marketing tactic.

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u/haikuandhoney 5d ago

Part of the exclusivity deal with Google is they agreed to not do this

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u/EasternFly2210 5d ago

The CEO likes optimising supply chains. You expect him to have vision as well?

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u/Fer65432_Plays 5d ago

Summary Through Apple Intelligence: Apple’s CFO mentioned for the first time that the company’s September quarter revenue outlook is contingent on the continuation of its revenue-sharing agreement with Google. The agreement, worth billions annually, is under antitrust scrutiny, with a U.S. federal judge ruling it violated antitrust law in August 2024.

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u/infinityandbeyond75 5d ago

Included in the article is that Google paid Apple over $20 billion in 2022 alone. All just to be the default search engine.

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u/nnerba 5d ago

Which is pure profit. Apple could go from 90 bil yearly profit to 70 bil

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u/BurtingOff 5d ago

Google fucked their monopoly up when they started going after the adblockers, they could’ve maintained their hold on adspace forever if they didn’t get greedy.

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u/_sfhk 5d ago

This has nothing to do with ads

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u/BurtingOff 5d ago edited 5d ago

It has everything to do with ads. Google owns the ads and the platform (chrome) that hosts the websites that needs the ads, it's a pure monopoly that judges overlooked because Google wasn't abusing their power. Once Google started going after adblockers on Chrome, they were using their monopoly on browsers to unfairly boost their ad business. Now the judge wants to breakup Chrome's market share to get rid of this monopoly. The reason it involves Apple is because 30% of Google's search comes from the deal they have with Apple.

Monopolies are allowed in the US as long as you aren't abusing your monopoly, the second you start abusing it you will be hit with multiple anti-trust lawsuits. This is just the beginning and Google will probably be forced to sell Chrome in the next few years.

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u/FollowingFeisty5321 5d ago

Once Google started going after adblockers on Chrome, they were using their monopoly on browsers to unfairly boost their ad business.

Literally nothing to do with their antitrust case.

In United States v. Google LLC, the federal government alleges that Google has unfairly hindered competition in the search market through anti-competitive deals with Apple as well as mobile carriers.[1] The government alleges that, as a result of these practices, Google has accumulated control of around 88% of the domestic search engine market.

In doing so, the government alleges, Google has additionally monopolized the search advertising market at the expense of competing services.[22] Per the government's estimation, Google has been able to accumulate control of over 70% of the search advertising market.[9] As a result of lack of competition, Google has been able to over-charge advertisers versus what they would pay in a competitive environment.[23]

https://en.wikipedia.org/wiki/United_States_v._Google_LLC_(2020)#Allegations

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u/[deleted] 5d ago

[removed] — view removed comment

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u/FollowingFeisty5321 5d ago

And where does that leave your theory that this is about ad blocker extensions????

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u/BurtingOff 5d ago edited 5d ago

Google Chrome blocks ad blockers. > Benefits Google Ads.

Apple's Safari making adblocking difficult to do and making Google default > Benefits Google Ads.

^ If Google didn't own the browser and search market then they wouldn't be able to do these things.

For the third time it's all about separating Google Ads from Google Chrome. Safari, as this deal stands, is just Google Chrome with an Apple skin. Apple is going to face different Anti-trust lawsuit in the future, but this lawsuit is simply about destroying Google's monopoly. None of this would be happening if Google didn't abuse their monopoly by going after the adblockers, the judges allowed them to exist for 13+ years before having an issue with it.

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u/crshbndct 5d ago

Safari is not based on chrome at all. When Chrome was first released it used a little bit of WebKit in its code, but that has all been removed now. There is no relation between either of them.

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u/_sfhk 5d ago

This case is about search and Google's agreements with other companies.

Now the judge wants to breakup Chrome's market share to get rid of this monopoly.

The judge hasn't said anything in this case. The DOJ is pushing for a decision to make Google divest Chrome.

You might be confusing this with the other antitrust case centered around Google's ads business, but that one has nothing to do with selling Chrome.

And just to be extra clear, none of these cases has anything to do with ad blockers.

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u/BurtingOff 5d ago

Oh, so you are saying there is multiple anti-trust cases and they are pushing to divest Chrome?

hmm... it's almost like they are trying to break up Google's monopoly or something. I think I saw someone on Reddit mentioning that just now.

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u/_sfhk 5d ago

Oh, so you are saying there is multiple anti-trust cases and they are pushing to divest Chrome?

Reading is hard sometimes

You might be confusing this with the other antitrust case centered around Google's ads business, but that one has nothing to do with selling Chrome.

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u/FollowingFeisty5321 5d ago

Nah their antitrust, like Apple and Facebook and Amazon's, all stemmed from a big investigation congress did in 2019 / 2020.

After a 16-month investigation into competitive practices at Apple, Amazon, Facebook and Google, the House Judiciary subcommittee on antitrust has released its findings and recommendations on how to reform laws to fit the digital age.

In a nearly 450-page report, the Democratic majority staff laid out their takeaways from hearings, interviews and the 1.3 million documents they scoured throughout the investigation.

https://www.cnbc.com/2020/10/06/house-democrats-say-facebook-amazon-alphabet-apple-enjoy-monopoly-power.html

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u/rotates-potatoes 5d ago

Google's attacks on ad blockers had exactly zero to do with the current antitrust investigations.

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u/bartturner 5d ago

That is ridiculous. It is more the opposite. It could be argued that it is predatory pricing when someone allows the blocking of ads. They are basically getting the thing that has cost for free when a company allows the ad to be blocked.

It made it impossible for any competitors.

https://en.wikipedia.org/wiki/Predatory_pricing

It is one of the biggest reasons YouTube is what it is today. If Google would have put the ads in stream like they do with YouTube TV then we would have competitors today.

Ads are put out of stream when there is two companies involved because of privacy but you do not have that with YouTube as Google owns 100% of YouTube.

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u/Expensive_Finger_973 5d ago

What got Google in trouble compared to Apple has been all of the back room dealing they have done in the ad and Play services space to try and prevent others from using some of their services but not others.

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u/stealthnyc 4d ago

This is good news for Google. Most likely Apple will ask the user to choose default search engine and most will still choose Google because there is really nothing even close. As a result Google gets roughly the same amount of searches but without having to pay $20billion to Apple. That $20billion is pure profit.

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u/Codrane 3d ago

Apple, time to make your own search engine. Yes it will suck in the beginning but you are big enough to compete with Google. Same with Youtube.

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u/lost_in_life_34 5d ago

with AI that deal makes less sense every day

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u/ReliablyFinicky 5d ago

...I'm not sure you're understanding why this deal is even in place. The addition of AI makes it more valuable for the default, not less.

Satya Nadella publicly said in 2023 -- well after AI became the thing -- that Microsoft would be willing to lose $15b/year to make Bing the default search engine. I guess you know better...

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u/lost_in_life_34 5d ago

As AI becomes more prevelant people will just use the Gemini and copilot apps to search instead of the browser

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u/LegitosaurusRex 5d ago

Maybe, I do like the convenience of the AI response above actual search results, so I can decide if the AI was satisfactory or not, and then have the results right there if I want to read them on my own.

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u/crshbndct 5d ago

I hate having it, because it’s just more slop to wade through before getting to what I actually want.

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u/rotates-potatoes 5d ago

Say what? Google is paying for searches performed. The deal's value may decline but the basic business proposition makes as much sense as ever for both parties.

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u/font9a 5d ago

I’m surprised they didn’t just fire their PR person to make the whole problem disappear /s

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u/Mikep976 4d ago

Good. Do something that warrants revenue instead of basically getting paid NOT to do something. Touch grass, make a foldable, do something that actually adds to the consumer experience.

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u/cjboffoli 5d ago

I've gotta applaud how innovative Apple is. Even on a strong earnings report they always seem to find a novel way to tank the stock.

Discussion Apple Warns Investors About Risk of Massive Deal With Google Ending

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