November 11, 2020 at 7:30 p.m.
- The U.S. Department of Justice recently filed a lawsuit against Google countering its search partnership with Apple.
- Google pays up to $12 billion a year to be the default search option on Apple devices.
- Increased activity with Apple’s web crawler indicates more interest in indexing websites.
- Search engines are remarkably complex to develop and scale to support billions of users.
Doesn’t Apple Already Have a Search Engine?
Although Apple offers Spotlight Search, this feature leaves much to be desired. If you’re searching for anything beyond a few distinct categories of information, such as points of interest, sports scores, weather, or other facts, you’ll most likely end up on Google.
Apple has search integrated into other products, such as Maps and even Apple Music. This is not the same as a web search engine. There’s a finite number of locations and songs globally, and they grow at a manageable pace. People around the world create almost 550,000 websites every day. Existing websites are a moving target, with continuous updates. A search engine such as Google can’t just be a side project, not even for a company as big as Apple.
Furthermore, Apple’s limited foray into search-related technologies remains challenging. Apple Maps is much better than its initial version; however, the company struggled to improve the service. When I briefly used Apple Music, it could not find results for an artist and album name, queried in combination. Even mediocre search capabilities prove elusive for Apple, a company best suited for making elegant, must-have devices.
Tech Analysts Believe Apple is Creating a Search Engine
As big tech undergoes scrutiny by the DOJ, the media runs wild with assumptions. Google’s sweetheart deal with Apple, making it the default search engine for eight to twelve billion dollars a year, may be coming to an end soon. The U.S. Department of Justice filed a lawsuit against Google; however, it remains unclear if any ruling will terminate the deal.
Corporations make deals all of the time. Being the most popular search engine in the world, Google appears to be a de facto monopoly. After all, the word “Google” is officially a verb. Due to EU regulations, devices sold in Europe must allow users to choose a search engine without defaults. Despite this opportunity for competition, Google remains the most popular search engine in the world — by far.
It makes sense as to why Apple would make a deal with Google. Presenting users with a variety of search engines adds more effort to initial device configuration. When someone gets a new iPhone, they want to be up and running as soon as possible. Since Apple has no search engine, it makes perfect sense to take up to $12 billion in exchange for Google’s default search status. Apple earns much-needed service revenues with minimal effort while simplifying user interaction.
The case for Apple creating its own search engine seems dubious at best. Circumstantial evidence supports the notion of an Apple search engine. Apple’s web crawler is more active lately; however, it’s more likely used to enrich Siri, Spotlight, and other limited search features in the Apple ecosystem. This activity and DOJ actions are the main justifications for Apple’s supposed web search engine. Under further analysis, an Apple web search engine would negatively impact revenues for the Cupertino tech giant.
An Apple Search Engine Would Have a Negative Return on Investment
It makes no sense for Apple to develop its own search engine. Search engines are expensive to create, maintain, and operate. Don’t be fooled by Google’s simple user interface. There’s a lot more going on than a web page with a simple text box. It would take Apple several years to approach what Google Search can already do today. In the meantime, Google would further improve its search capabilities.
Google Search handles 2.4 trillion search results per year, at a cost of approximately six cents per search. How would Apple scale to handle even a fraction of this traffic and present rich, meaningful and accurate results? How would Apple monetize web search results to pay for this phenomenal endeavor?
Given Apple’s commitment to privacy, it’s virtually impossible for them to run a profitable search engine. Running it at a loss makes no sense, as there’s no future profitability in it either. An Apple search engine doesn’t create significant synergies to drive consumers to new devices and services.
The most likely outcome is that Apple’s deal with Google gets replaced with users opting into their search engine of choice. In the EU, where users have such options, they overwhelmingly select Google as their default search engine. If it comes to this in the U.S., most will choose Google.
If Apple develops its own search engine due to a court ruling, it’s unlikely they would be able to default users to it. Most people will choose Google, not Apple’s offering, if the iPhone maker must provide search engine options. They’d spend billions only to lose out to Google. It would be one of the worst business decisions ever.
An Apple search engine makes no sense. If their deal with Google falls apart, they lose up to $12 billion a year. Developing its own search engine would lose Apple even more capital.
Apple’s best outcome is for its deal with Google to survive the legal battle. If it doesn’t, they’ll give consumers a choice of search engines. Spending tens of billions running a search engine as comprehensive as Google would produce a negative return on investment for Apple. As iPhone sales decline, it’s the last thing the Cupertino company would do.