The court ruling that Google is no longer allowed to pay Apple $20B+ a year to be the default search engine raises the question: What now? One potential answer being suggested is that the iPhone maker create its own Apple search engine.
But much as many of us might like to see that, it seems like an unlikely prospect – and just not worth the potential risks …
The ending of the Google deal
If you carry out a web search by typing your query into the integrated Safari bar, that search will (unless you manually changed the default) be carried out on Google. That’s because Google paid Apple a multi-billion dollar sum each year for the privilege.
For Apple, it was a worthwhile sum even by its standards, and it was almost pure profit. For Google, it got search traffic from a valuable demographic. It was a win-win.
Except for other search engines – and potentially their users. That’s why the payment was recently ruled to be an abuse of Google’s dominant position in search.
Speculation about an Apple search engine
Some have argued that Apple would want to replace that revenue, and one way to do so would be to create its own search engine.
The company has already been indexing the web using Applebot for around a decade now – initially for Siri, and more recently to train Apple Intelligence.
The thinking, then, is that the iPhone maker already has the data, and it has the resources needed to potentially build a better search engine than Google.
But it’s not that simple
However, as the latest piece exploring this idea notes, that wouldn’t be a trivial undertaking. While Apple has an index of the web, Benedict Evans points out it doesn’t have what Google has – which is all the data derived from people carrying out web searches.
A search engine is a vast mechanical Turk – a reinforcement learning engine that uses human activity to understand the web. PageRank used signal from links created by people, but once people started using Google at scale, that usage itself created far more signal: which results you clicked on, how you changed your searches to get better results, and what else you searched for before and after. That then applies on the advertising side as well: the more search ads Google serves, the more it knows about which ads are effective and the higher its revenue-per-query.
So, search is a virtuous circle. Everyone uses Google because it has the best results, and it has the best results because everyone uses it.
Revenue isn’t key
Some point to the potential for Apple to replace that $20B payment with revenue from Apple Search, but as I noted at the time, while it’s not a small sum of money, it’s not a game-changer.
Apple last year made $85B from Services, so if it loses the Google payment, it’s a setback, sure – but aside from a one-off recalibration, it isn’t going to change that upward trajectory.
Indeed, it would make back that lost revenue in around 18 months of continued Services growth, at current rates.
It would be a very risky move for Apple
Google’s business model is a rather murky one, reliant on using masses of user data to improve its offering and sell personalized ads. That’s very much not the kind of thing Apple wants to do, and to take any steps down that path would risk damaging the brand.
The only potential way it could make sense is to use it as a way to further enhance the ecosystem, by implementing search in a privacy-focused way, without worrying too much about ad revenue.
But that’s financially risky. Not only would Apple incur substantial costs in building and operating its own search engine, but we don’t even know whether search engines in their current form have a future.
Chatbots haven’t replaced them yet, but they may do so over time. Investing billions in re-creating Google makes even less sense at a time when Apple might find itself re-inventing a technology that’s on the verge of being made obsolete.
Image: 9to5Mac montage using images from Apple and Google
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