We're less than two weeks away from the start of this year's Worldwide Developers Conference (WWDC). Between now and then, hang tight and enjoy the ride. Rumors, wish lists, and predictions from analysts and tech writers alike are incoming about Apple's newest hardware and software products.
The latest nugget comes from Bernstein analyst Toni Sacconaghi, who says Apple should purchase the DuckDuckGo search engine and end its long-standing agreement with Google. Sacconaghi, who just last week made a strong case for a sub-$250 Apple Watch, brings up some interesting points here. However, there are plenty of reasons to believe this will never happen.
Currently, Google pays Apple around $7-8 billion a year to be the default search engine on iOS. This payment isn't a lot, especially when you consider the market caps for both companies nears or exceeds $1 trillion each, depending on the week.
Nonetheless, this arrangement has been right for both companies, with the former remaining the No. 1 search engine in the world. At the same time, the latter can concentrate on doing other things in iOS and iPadOS. The agreement also means some rare harmony between the two competing tech giants, at least on this issue.
And yet, like Sacconaghi, I believe Apple could benefit, at least to a degree, by acquiring DuckDuckGo and thereby cutting ties to Google Search.
For one, Apple could likely get the No. 4 search engine in the U.S. for less than $ 1 billion. As Sacconaghi notes, this amounts to "less than a week's worth of cash flow."
Snatching DuckDuckGo would also allow Apple to reassert its privacy bona fides. The search engine, unlike Google, doesn't store personal content and keeps search information away from advertisers. No doubt, these are the central reasons users now perform over 1.8 billion searches per month using the engine.
And yet, I don't expect Apple to acquire DuckDuckGo because there are few significant reasons to do so.
First, I can't imagine anyone inside Apple feels now would be a great time to begin another battle against Google, especially with the world in a recession.
Then there's the issue of revenue, or lack thereof, in comparison with Apple.
As a private company, DuckDuckGo doesn't have to publish its yearly revenues. In October 2019, however, Megan Gray, the company's general counsel and head of policy, told visitors at Bloomberg's Sooner Than You Think conference that revenues are "well above" $25 million per year.
Even if this number were $50 million or $100 million a year, it would dwarf in comparison to Google, which reported 2019 ad revenues of nearly $135 billion. Apple's 2019 revenues, meanwhile, topped $260 billion.
It's also important to note that were Apple to replace Google with DuckDuckGo as the default browser suddenly, the former wouldn't go away. Yes, by becoming the default browser on iPhone and iPad, DuckDuckGo would instantly gain millions of new users. And yet, it would almost certainly not be enough for it to overtake Google.
Though Google is Apple's default search engine for Safari, as an end-user, you can change this to DuckDuckGo, Bing, or Yahoo.
Finally, understand that historically, Apple likes to build stuff from scratch rather than buy something already on the market. If Apple wants a search engine to call its own, it's more likely to begin fresh than to acquire an existing product.
What say you?
Do you think Apple should purchase DuckDuckGo? Let us know in the comments below.
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