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Lawrence Latif

Google Pays Apple About $1 Billion to Remain Default Search Engine

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apple-googleGoogle will pay Apple $1 billion in 2014 to be the default Internet search provider on iOS devices, including the iPhone and iPad, according Scott Devitt, an analyst at Morgan Stanley.

Google pays certain companies to be their default search provider, most notably Mozilla with its Firefox web browser.

Thirty-one percent of Google's traffic acquisition costs will go toward Apple in 2014, according to Devitt's calculations. However, Mozilla will also see the amount it receives from Google grow.

Devitt forecast that Mozilla will pick up $400 million in 2014 from Google, a 33 percent increase from this year, while Google will spend a total of about $3.5 billion to make its search engine the default in third party software products.

Although Google's expenditure might seem high, Google controls 95 percent of the mobile search market. This deal shuts out rival search vendors such as Bing from the default search position on most smartphones and provides Google with valuable data when mobile device users access its search engine.

And Apple? It gets $1 billion at no cost to it, simply for having popular devices.

Devitt predicted that by the end of this decade Google will pay close to $6.8 billion a year for traffic acquisition.

This article was originally published on the Inquirer.

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