Apple should end their Google search partnership (2023)
magiclasso.coI thought it was universally understood that Apple has been working toward ending its dependency on Google Search for about a decade.
One can witness the firepower of Apple's fully armed and operational search engine today, which is hidden in plain sight: https://imgur.com/a/SThluBm.
That said, Apple should not end its Google Search partnership until one of the following occurs: (1) it's strategically important for Apple to provide Safari's default search engine, (2) a government mandates that Google can no longer pay (or pay Apple) for the privilege of being Safari's default search engine, or (3) people stop preferring Google search by a wide margin.
(1) Making Apple Search the default for Safari would cost Apple $20 million per year, but could open up a bunch of new revenue streams and potentially provide a much better search experience for Apple users (especially if Apple's GPT partner isn't Google).
(2) If the EU mandates that Google can no longer pay-to-play in general, or can't do so with Apple in particular, no problem. Users will choose their search engine on a platform where Apple has a home-field advantage.
(3) In the extremely unlikely event that Google goes from hero to zero in search, boom — Apple Search is ready.
In summary, this is a terrible time for Apple to stop taking Google's money. They should wait until the GenAI players settle down, until the advertising part of the business matures and can capitalize on the change, and until governments stop looking for limbs to chop off.
$ 20B a year is what google pays [1] + the cost of running and maintaining their engine.
$20B is a 1/6th of their operating margin for very little effort.
[1] this was revealed in the recent anti trust trial
> Making Apple Search the default for Safari would cost Apple $20 million per year, but could open up a bunch of new revenue streams
You mean, it would change Apple's incentives to those of Googles. The customer no longer being the customer but rather who's ever paying these new revenue streams.
They don’t ever include monetizable search results though, anything that would generate ad revenue goes off to google since the deal they have isn’t a flate rate, it’s a revenue split.
Apple knows enough to not use their search engine in place of anything with actual ad dollars attached to it.
I think Apple Search is (sort of) already the default in Safari. The top result is (as far as I know) from Apple's search engine instead of Google.
"Apple Maps, launched in 2012, initially faced several hiccups and criticisms, but today, it arguably matches or exceeds Google Maps in many areas." - not in my experience.
Also, concerning the "partnership", it is impossible to configure Google Maps on iOS as a default map handling application. Due to EU legislation Apple must change this (in the EU only) but this is supposed to happen in iOS 18 or something (in 2025).
Apple Maps is fairly good in the US. Not in Europe, it sent me to the wrong place a couple of times.
However, directions on Google Maps has been corrupted by Waze - it tends to save you a tiny bonus of time by sending you in weird paths or simply cheating (using the exit lane on a cloverleaf to bypass traffic). Super frustrating and panic inducing if you aren't familiar with the area.
Maps is a pretty app. That’s what Apple is good at.
But the backend is just plain bad. Searching for common landmarks nearby provides suggestions from 1000s of km away.
What is the alternative here? The default search position is very valuable. If Google didn't pay for it, someone else would. Should Apple auction it off but disallow Google from winning it? That seems maybe OK I guess?
Should Apple take it for itself and build a search engine? Ironically, this seems like it would make Apple guilty of exactly what many antitrust arguments decry at the moment: a company leveraging its position in one area to give itself a boost in another.
Apple should but under Tim Cook, Apple could?
I feel Tim Cook is going down the same rabbit hole as Steve Ballmer, chasing ways to juice the iPhone/iOS cash cow. And now with dividends, it's an aim at spiking the stock price while revenue isn't growing much.
A $15B dip on Apple's earnings would shock their price. Apple seems to have fallen into the trap of chasing quarterly earnings while sacrificing their long term growth.
They found a way to launder the sale of their users' data through this deal so they can make billions and most people don't even realize they've been sold. I doubt they'll just give it up.
I keep hearing Raspberry Pi guy’s complain about how Google Search is “dying”, but I don’t see regular people using anything else.
That because they search using their url bar which is exactly what this article is talking about.
If Apple changed the default search engine all these people you know would instantly just starting using something new.
Survival of the Fattest
Last week, as part of the US Department of Justice investigation, documents were released that showed Google paid Apple $20 billion in 2022 to retain the search partnership.
This is almost 20% of Apple’s total operating profit for the year.
It’s never a good idea for a company to be so reliant on a single partnership or client.
It distorts incentives, is high risk and sometimes, as in Apple’s case leaves a company blind to other opportunities it could be pursuing.
On top of it all, Apple’s search partnership with Google trades their customer’s privacy for search $ kickbacks.
Based upon all this, it should be time for Apple to end this partnership and pursue their own search solution.
Search is a hard problem, and if they haven't decided to cut the $20 billion, it's because they believe Google is the best.
I do think Google has been decreasing in quality over the years, but when I use any of the privacy focused alternatives like DuckDuckGo, Brave or Kagi, I end up using a !g bang every 2/3 searches.
The others just aren't there yet, and they know that.
Agree that Search is a hard problem.
So was Maps, but Apple committed the time, resources and focus to make it happen. In 2024, I would say the Maps initiative has been an overwhelming success.
As per the article, Apple already has a search solution in Spotlight, which though it hasn't been battle tested as a general web search solution, seems to be a great basis to improve and make better.
My concern is that due to their addiction to the Google partnership money, Apple don't even seem to be contemplating their own Search approach.
This is how we end up with monopolies in product areas as the big tech players, in effect, collude to not compete in core areas of business due to partnership agreements.
Radically different experience here. When I used DDG by default for a couple years, I'd resort to !g maybe 10-20% of the time. For the last few months with Kagi, it's literally 0 times I've even been tempted. Paying $5/mo to be a customer and not the product, having my privacy respected, and enjoying consistent access to excellent search results is IME equivalent to switching from browsing without an adblocker to using ublock plus or trying reader mode for the first time. It's transformative.
I have had the same experience.
Google search results can be quite a bit better for local and commercial queries.
I use Kagi everyday since a while ago and used ddg before that and almost never had to resort to google, personally. Even less with Kagi than w/ ddg.
It's just a bit ironic that Apple keeps the lights on by paying with their user's privacy. If I was a Google executive reading this I'd be in stitches, this is exactly how you keep the ad economy going. Something tells me Apple doesn't even care anymore either, since they know there's only so many profitable options once their service revenue is regulated down to a trickle.
I also tried switching to DuckDuckGo for a bit, and then Kagi after reading rave reviews here on HN. I churned after about a week with Kagi as my default search engine in iOS Safari. It was too weak at contextually aware / local search in particular. It might do better for me on desktop which tends to be a bit more knowledge research focused.
Google is pretty much unusable today if you don't look for specific websites. If you are using it to look up information, learn or discover new things in the web it is just SEO LLM spam. Features like shopping and LLM-powered Q&A are quite misleading and potentially dangerous for a trusting user.
Google didn't give Apple 20% of their revenue for the year, they were responsible for 20% of their profit. AAPL is $2.8T and their P/E is 28. They earn about $100B a year. And if I'm recalling their profit/revenue ratio correctly, that's $100B on about 400B in revenue. Making Google's money 5%, not 20%.
That's still a lot for a default URL.
The post says "almost 20% of Apple's profit", and you note the profit was $100B and the payment was $20B, making it 20% - is something going over my head?
Yes - all $20B isn't pure profit. It must take 25% of an engineers time to maintain the search box in safari. So lets say it is only $19,999,899,999 in profits.
Your math is off. They have to pay the engineers whether it’s towards Google or Microsoft. Those $20B are pure profit
No, if they deleted the search box and didn't need to maintain it, there would be no engineer required to maintain it.
Makes zero sense. No search box will ever be dropped. If it’s not Google it’s Microsoft or Apple.