To keep Google as the default search engine on Apple devices (iPhones, iPads and Macs), Alphabet pays 36% of the amount collected on searches made through the Safari browser. That part of the deal between the two companies was accidentally revealed during Google’s monopoly trial. The information was kept confidential by Alphabet (owner of Google) under the justification of maintaining its competitiveness with competitors and customers.
Google has been the default search engine for Safari, Apple’s browser, since 2002 (5 years before the launch of the first iPhone). Every customer of the apple company, whether the owner of an iPad, a Mac or an iPhone, has Safari installed natively on their device. Google pays up to $20 billion for this exclusivity of its search engine.
However, digging deeper into the explanation, 36% of Google’s revenue from ads in Safari also “returns” to Apple. That is, for example, every time a user searches for something through Google in Safari, he is “helping” Apple to make more money in the deal.
Apple and Google, a money-making cycle
Elsewhere in the trial, it was revealed that the term “iPhone” is one of Google’s most lucrative ads. As much as the data is from 2018 (and with iPhone 8 on the rise), Apple’s smartphones are still among the most desired electronics by consumers.
Thus, paying for the keyword “iPhone” continues to pay off for stores and especially for Google — which makes money from clicks on ads. When you search for your smartphone on Google, you get a carousel with eight ads at the top of the screen, followed by the paid link to Apple’s page.
It is worth remembering that the term “iPhone” is relevant even if the user does not search for the most current model. With the release of a newer version, consumers can search for previous iPhones — so much so that the carousel in the image doesn’t show the new iPhone 15.
In the end, it’s the Yin and Yang of profit between Google and Apple: I pay you there, then you pay me here. But now that everyone knows that Alphabet pays 36% of revenues on Safari, other customers (cof cof Samsung) may want a contract change.
