Google – Alphabet Inc (NASDAQ:GOOGL) – is forecast to pay Apple Inc (NASDAQ:AAPL) approximately $15 billion to be the default search engine on the Safari web browser.
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Friendly Animosity
According to Bernstein analysts, the agreement is secret and the details and its extension are unknown. However, they have forecast that Google will have to splash the enormous sum this year, and $20 billion next year.
This is a well-known Google tactic to make its search engine the top choice in all web browsers.
For instance, Mozilla Firefox has still survived partly thanks to a similar deal with the internet giant. However, the latter’s deal with Apple is a very curious one, not only because of the amount of money offered, but also because of the public enmity that both companies maintain.
Apple has denounced Google’s practices on many occasions, trying to separate itself from the privacy scandals. Apple’s official explanation of why it continues to trust Google as the default browser is that it “is the most used.”
Both companies seem to benefit from this deal. For Google, it is still extremely important not to allow the surprise arrival of a competitor for its flagship product –it wants it to be on absolutely all mobiles by default.
Competition Fears
Apple’s senior director of global privacy Jane Horvath was quoted as saying on 9to5Mac: “Right now, Google is the most popular search engine. We do support Google but we also have built-in support for DuckDuckGo, and we recently also rolled out support for Ecosia.”
The payment may actually be a way to prevent Apple from developing its own search engine. That was exactly the rumor last year, as the world has already seen a sneak peek of the iPhone built-in search, which doesn’t use Google but Apple’s own search engine.
In addition, the payment falls within the services division of Apple, the one that has gained the most importance in the last two years. The area helps the company diversify its offer and not depend so much on hardware sales.
In short, no one would stop using Google if it stops being the default browser on Safari, but Google may have more reasons to make this annual payment.
Google is are part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.
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