NIXSolutions: Apple Made More Money From Bing Than Bing Itself

Microsoft’s persistent endeavor to displace Google as the default search engine on the iPhone has spanned several years, yet Apple has steadfastly maintained its allegiance to Google, occasionally renegotiating terms for improved commissions. Mikhail Parakhin, Head of Advertising and Web Services at Microsoft, disclosed this during the US government’s antitrust lawsuit against Google in Washington.


Apple’s Long-standing Pact with Google

For nearly two decades, Apple has designated Google as the default search engine in its Safari browser, commencing in 2003, in exchange for a share of advertising revenue generated from searches originating on Apple devices. The US Department of Justice alleges that such contracts, among others, enabled Google to unlawfully establish a monopoly in the online search market. Google, on the other hand, counters that users opt for its search engine due to its superior performance.

Bing: A Perpetual Bargaining Chip

Parakhin, who joined Microsoft in 2019 from Yandex, noted that in 2021, Microsoft engaged Apple in discussions regarding the potential adoption of Bing as the default search engine. However, no substantial progress was made. Bing has consistently functioned as a bargaining tool in Apple’s negotiations with Google, primarily aimed at securing more favorable terms. Parakhin emphasized, “Apple reaps greater benefits from Bing’s existence than Bing itself does.” He added, “Our endeavor is to persuade Apple to embrace our search engine, but Bing has perpetually remained a mere bargaining instrument.”

Parakhin acknowledged that if Bing were to become the iPhone’s default search engine, it would be a “game changer” for Microsoft. In response to Google’s legal team, he asserted that further investment in mobile search technology would not be profitable for Microsoft unless the company secured a more extensive and dependable distribution guarantee.

The exact financial details of Apple’s search agreement with Google remain confidential, notes NIXSolutions. However, the Justice Department estimates it to be in the range of $4 billion to $7 billion annually. Apple has expressed its readiness to vigorously protect and uphold this contract in the face of regulatory and legal challenges, including the Justice Department’s lawsuit.