Microsoft and Apple are said to be discussing a deal to make Microsoft's Bing the default search engine on the iPhone. In a classic example of "the enemy of my enemy is my friend" strategy, BusinessWeek reports
that Apple is going to its traditional arch-rival Microsoft as an ally in its new war against Google. But according to at least one analyst, the move carries great risks for Apple's brand identity.
Apple and Google have increasingly been coming into direct competition as Apple moves into online services such as mobile ads and as Google brings its Android mobile OS and Nexus One phone to market. According to BusinessWeek, Microsoft and Apple are not only discussing making Bing search the iPhone default, but also incorporating it as the default search engine on Apple's Safari browser.
"Apple and Google know the other is their primary enemy," said an anonymous source, supposedly with knowledge of Apple's plans, who was quoted by BusinessWeek in their story. The source also noted Apple's interest in the mobile advertisement business. Earlier this month, Apple bought the mobile ad company Quattro Wireless for $275 million
US, Coming after Google's acquisition of ad firm AdMob, the purchase indicated that the two companies were opening a war for the mobile ad market. Apple could leverage its existing business to bootstrap its mobile ad enterprise, likely offering developers the ability to do in-app advertising, and take a cut of the ad sales like Google does now.
One analyst, however, sees potential danger in this alliance. AppleInsider features Oppenheimer's Yair Reiner
saying that an Apple-Microsoft deal could be risky for Apple, which has created its marketing identity over the years as an alternative to Microsoft, and most recently making fun of Windows in its "Get a Mac" ads. "Cozying up (to Microsoft) could bring more risk than reward, not least because it would clash with the Mac vs. PC campaign and the Apple brand identity that has coalesced around it," Reiner said.
If the deal comes to pass, it would position Bing for significant growth in the search engine wars. Bing had only 10.7% of all US search traffic in December, according to market analysis firm Comscore, while Google had an overwhelming lead at 65.7%.
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