Google Paying 100 Million a Year for iPhone Search?
For Apple, that's not a lot of money. But, it's enough that it doesn't make sense for Apple to put considerable resources towards building its own Internet search engine. And, if Apple wanted more money or options, there's Microsoft -- with Bing and a big checkbook.
With Apple building a $2 billion dollar data center in North Carolina, and those rumors/manipulations about talks with Microsoft's Bing, it might be less about the money (which Apple has in ginormous, Scrooge McDuck-sized piles) and about, well, what these things are usually about for Apple -- control.
The iPhone's share of mobile search is likely something Google wants to maintain and Microsoft more than likely would love to take over via default status. The oncoming iPad, depending on its level of mainstream adoption, could be a significant presence as well. And users who valued design and experience enough to get a premium device like the iPhone (or iPad in the future) could be lucrative targets for advertisers once they figure out their segmentation models.
We can't dismiss Apple completely, however. They bought Quattro Wireless, a competitor to Google's recent Admob acquisition, because Steve Jobs wanted to "provide a better user experience", i.e. hedge Google and compete on his own terms. (Just like iWork does for Microsoft Office, MobileMe does for Exchange, Final Cut Pro does for Adobe Premiere, etc. etc.)