Details about Apple's search deal with Google emerge

Google is said to have paid $1 billion to remain the default search engine on iOS

Financial trends and news by Steven Loeb
January 22, 2016
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Isn't it a little strange that when you use an iOS device that Google is the default search engine? After all, Apple and Google are major competitors in the mobile space. So why would one give the other a platform? It's just odd.

If you guessed money was behind it, you'd be wrong. Actually, the correct answer is a whooooooole lot of money. Google paid Apple a whopping $1 billion in 2014 to remain as the default search engine, according to a report out from Bloomberg on Thursday.

That information comes from a legal case between Oracle and Google, in which Oracle is accusing the company of using its Java software to develop Android without paying for it.  By the way, if Oracle gets its way in that case, Google could have to pay another $1 billion in damages, given that Orace has expanded its claims to cover newer versions of Android. So, ouch. 

On top of the flat fee that Google paid to Apple, it is also giving the company money on a recurring basis as well, since Apple is also taking a percentage of all the revenue that Google makes through the deal.

What that percentage is, though, is not entirely clear. It was revealed in the Oracle case that the split was, at one point, 34 percent, though its unclear which side was keeping that amount, and which side was keeping the other 66 percent. It would seem more likely that Apple was getting the smaller amount, but, either way, Apple is walking away with a pretty penny on this one. 

Neither side wants any of this information to be made public, of course, and both have been trying to squash it.

An attorney for Google objected that the percentage was at all disclosed during the Oracle trial, and tried to have the judge strike it from the record. When that was turned down, Google tried to get the judge to redact the transcript, a move that Apple also supported. 

“The specific financial terms of Google’s agreement with Apple are highly sensitive to both Google and Apple,” Google is quoted as saying in a filing. “Both Apple and Google have always treated this information as extremely confidential.”

The most interesting thing about is the fact that Apple has made money from Google, a company that CEO Tim Cook has criticized in the past for invading privacy with the very advertising model he was capitalizing on.

“Our business model is very straightforward: we sell great products,” Cook said in 2014. “We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t ‘monetise’ the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you.”

VatorNews reached out to Apple and Google for comment on this report. We will update this story if we learn more. 

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