June 1, 2015

Google and Apple: Don’t Bite the Ad Revenue That Feeds You

The Google logo scraped into a red apple.
Courtesy of Today'siPhone.com
By Lauren C.

For years, Google and Apple have maintained a mysterious relationship. In the past, the Tek Team has analyzed the powerful love-hate connection that exists between these two, and why this give- and- take partnership benefits both corporations.

Despite their very public spats and courtroom battles, there’s a recent analysis that explains why Google desperately needs to maintain a cordial friendship with Apple. According to the New York Times, a whopping 75% of Google’s revenue comes from iPhones and iPads. This infers that in the 11.8 billion in ad revenue that Google collected during 2014, over 8 billion came from Apple devices alone.

So Does Apple Even Need Google?

It makes perfect sense why Google needs to be buddy-buddy with Apple. Things could be very dicey if Apple decided to bounce Google out of its default spot on Safari. Though Google is the number one search engine, it wouldn’t be above Apple to play such a devious trick.

After all, there are rumors that Apple is secretly working on its own search technology to put in that default position. For Apple, this would be a win-win situation. It would allow all of their ad revenue to go back to themselves instead of a third party entity such as Google.

However, because of Google’s reliability and name recognition, Apple does benefit from having Google in that third party position. At least with Google, the user knows the experience will be efficient, top notch, and dependable.

Furthermore, Apple is deficient in one area that Google isn’t- the management of data. As one critic said, “one of the key ingredients in Amazon, Facebook, and Google is data. Those businesses were built on deep technical understanding of how to manage swaths of data. Apple doesn’t know how to do that.” For example, Apple replaced Google Maps with its own Apple Maps, which has been met with numerous problems and embarrassments. Who’s to say that a hypothetical Apple search engine won’t be a disaster too?

What’s Next for Google?

The default search deal between Google and Apple will be up sometime this year, according to various reports. If Apple does not create its own search engine technology in time, which it probably won't, there are other alternative scenarios for what could happen next.

According to The Information, both Microsoft and Yahoo are gunning for the default spot on Safari. One anonymous source claims that Apple will make a decision based on “the quality of the product as much as the potential money made from search ads.”

As for Google, they have put many of their eggs in one basket by assuming that their search traffic will be obtained through other means. Should they be so sure of themselves? Given the dominance of iPhones and iPads, the ball seems to be in Apple’s court.

Don’t cry for Google yet, though. We at TekShouts! strongly believe they will get past this crisis.

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