Google to Pay Apple $1 Billion for Search Rights

According to a recent report from Morgan Stanley, it might cost Google a small fortune (though what’s a small fortune when you’re a tech giant?) to remain the default search engine on iOS devices past the year 2014. This figure is up significantly since 2009, when Google only forked over a pittance of $82 million for the right to be the first choice on Apple products.

With rumors of a ten-figure payout to Apple, many at Google are worried that they won’t be able to afford enough paint to keep the place looking like a high-tech pre-school.

The report suggests that the price has increased so much due to the fact that the deal is tied in some fashion to iOS unit sales. The more iPhones, iPads, and iPad minis that Apple sells, the more valuable the privilege of being the default search engine on these devices becomes.

Another reason for the price hike has to be an increase in competition. Yandex, the Russian search engine, continues to grow, as does Baidu, the Chinese service that recently signed a deal with Bing. Speaking of Bing, Microsoft’s answer to Google is already the default search engine for Kindle Fires and Blackberry devices.

Who’s going to come out on top? Could Apple eventually shut out Google (which, by the way, is completely out of the world’s largest Internet market, China), and how much would it matter? We’ll have to wait and see. For now, at least Google finally seems to have some actual competition.

James on Google+

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