Google Paying 100 Million a Year for iPhone Search?

Silicon Alley Insider claims, according to a source, that Google pays Apple $100 million dollars a year to be the default search engine for the iPhone. Frenemies indeed:

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.)

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Google Paying 100 Million a Year for iPhone Search?


What that's alot of money ohhhhhh..Does Steve Jobs have kids b-cuz if he does there very lucky!!!!!!

Financially I'm not sure it would be a good idea to create their own search engine. It's a double edge sword.
First, it could become the leader in portable application search technology just as Google has for the internet. Could even beat google out.
Second, their money comes from this sort of thing. By using and selling software for others taking a cut as well as a membership fee.

I Apple figth vs Google in Search field, Apple would be lossed. I think a little bit of money is more than nothing.

God damn it just give me ONE of those millions.. It's mind-boggling how companies toss around hundreds of millions of dollars like it's nothing.

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