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  • Google to Lose Billions in Annual Revenue if Apple Doesn't Renew its iOS Search Deal


    According to a new memo by analysts at UBS, Google is currently in a position to potentially lose billions in annual revenue if the Cupertino California company doesn’t renew a deal making Google the default search engine in iOS. The existing search deal is due to expire this year and Google investors are reportedly worried that Apple will reject a new deal. According to estimates, Google will generate roughly $7.8 billion in revenue from its iOS deal this year which is roughly 10% of gross revenue.

    If Google loses this much or more going forward, the move could substantially hurt the company. In practice, UBS suggests that at least some people would want to switch back to Google even if it wasn’t the default service so the damage won’t be as bad as if everyone swapped over. Assuming a 50% “switchback” rate, this would roughly halve the impact on gross revenue and reduce the net revenue down by 3% in part because Google wouldn’t be paying Apple any fees anymore. UBS wrote the following regarding the matter:

    We believe this is a much smaller headwind that many investors expect.
    For those of you who didn’t know, Mozilla recently switched the default search engine in Firefox from Google to Yahoo. This move helped drop Google’s desktop search share in the US below 75% while simultaneously increasing Yahoo’s numbers. The two companies have a relationship which seems to be conflicted and hampered by not only growing competition across segments but also the aftermath of a long series of lawsuits against Android device makers which was originally instigated by Steve Jobs.

    For those of you who don’t remember, Jobs infamously referred to Google’s Android OS as “stolen,” even going as far as threatening to go to “thermonuclear war” over the matter. Tim Cook started off with the same campaign but later ended up claiming victory in various cases and dropping legal action in others.

    Going back to the search engine options, Apple has several to choose from. Aside from going with Yahoo, Apple could also end up going with Microsoft’s Bing which is already in place for some Siri queries. If for some odd reason, Apple decides to emphasize both privacy and security, it could potentially go with Duck Duck Go which was an added option for iOS users that was added just last year.

    We’ll have to wait and see what Apple ends up doing.

    Source: UBS via AppleInsider
    This article was originally published in forum thread: Google to Lose Billions in Annual Revenue if Apple Doesn't Renew its iOS Search Deal started by Akshay Masand View original post
    Comments 20 Comments
    1. NSXrebel's Avatar
      NSXrebel -
      Good.
    1. TDH Advocate's Avatar
      TDH Advocate -
      I may hate Google as a company but all other search engines are complete garbage. Id rather use yahoo than bing but Google is my go to for evrrything I possibly can use it for. I really hope apple renews the contract.
    1. NSXrebel's Avatar
      NSXrebel -
      Quote Originally Posted by TDH Advocate View Post
      I may hate Google as a company but all other search engines are complete garbage. Id rather use yahoo than bing but Google is my go to for evrrything I possibly can use it for. I really hope apple renews the contract.
      Why? You'll still be able to change your default search engine if you choose so.
    1. eprisencc's Avatar
      eprisencc -
      I use chrome on iOS so I could give sh!t less if they drop google because it will remain the default way to search in that browser.
    1. peacedog's Avatar
      peacedog -
      Bring back Ask Jeeves!
    1. fleurya's Avatar
      fleurya -
      Quote Originally Posted by TDH Advocate View Post
      I may hate Google as a company but all other search engines are complete garbage. Id rather use yahoo than bing but Google is my go to for evrrything I possibly can use it for. I really hope apple renews the contract.
      Relax. You will still have it, just not by default.

      I use Bing and it seems just as good to me.
    1. Silverado1987's Avatar
      Silverado1987 -
      Quote Originally Posted by peacedog View Post
      Bring back Ask Jeeves!
      Let's bring back Netscape while we're at it (sarcasm)
    1. rickuk's Avatar
      rickuk -
      Without Google being the default search engine the line at the Genius bar would be a mile long with people wanting to get Google set back as default
    1. edwilk55's Avatar
      edwilk55 -
      All because Google was too greedy to allow turn by turn directions in their maps app....forcing Apple to spend millions and probably billions by the time it's over with to create and perfect (long way to go) their own application. Eff 'em!!!
    1. studderman's Avatar
      studderman -
      Theres the Google app, and the Google chrome app, its no big deal if they remove it from the default options
    1. Jahooba's Avatar
      Jahooba -
      I moved away from Google a while ago after i learned how much they censor their search results. Also, they're a highly political company that supports Socialism. I just can't get behind that considering how Hitler used Socialism as a gateway to totalitarianism.

      Remember history!
    1. docmagoo2's Avatar
      docmagoo2 -
      Quote Originally Posted by TDH Advocate View Post
      I may hate Google as a company but all other search engines are complete garbage. Id rather use yahoo than bing but Google is my go to for evrrything I possibly can use it for. I really hope apple renews the contract.
      I agree. Bing and yahoo are garbage. Try duckduckgo for a search engine that's anonymous and doesn't track
    1. eprisencc's Avatar
      eprisencc -
      Quote Originally Posted by Jahooba View Post
      I moved away from Google a while ago after i learned how much they censor their search results. Also, they're a highly political company that supports Socialism. I just can't get behind that considering how Hitler used Socialism as a gateway to totalitarianism.

      Remember history!
      Don't bring politics in this conversation. You're sounding too much like Fox News.
    1. NewD's Avatar
      NewD -
      Quote Originally Posted by eprisencc View Post
      Don't bring politics in this conversation. You're sounding too much like Fox News.
      LOL!! Don't be naive. All news has political bent. All the major networks and MSNBC are flaming leftist bent and the one single network Fox is right wing. Nice odds! NOT!!

      I will admit I miss the days of the 60'-80's where "hard news" was just news. You never knew which political direction the news people leaned. Not so anymore. A real shame..
    1. eprisencc's Avatar
      eprisencc -
      Quote Originally Posted by NewdestinyX View Post
      LOL!! Don't be naive. All news has political bent. All the major networks and MSNBC are flaming leftist bent and the one single network Fox is right wing. Nice odds! NOT!!

      I will admit I miss the days of the 60'-80's where "hard news" was just news. You never knew which political direction the news people leaned. Not so anymore. A real shame..
      Well CNN is not a bastion of liberalism either. Additionally, MSNBC has Morning Joe on the right. Fox has nothing on the left side of the aisle since it ditched Hannity and Colms. Furthermore, more corporations support republican candidates than democratic ones, however, you lambast one of the few companies that tilt slightly left. I say more power to Google.
    1. NewD's Avatar
      NewD -
      Yes.. CNN isn't a 'bastion' of liberalism I'll grant you that.. But is indeed more left leaning than right in the way it reports.. And yes Fox doesn't have a whole 'left leaning' show, but all its opinion shows bring left leaning guests into their segments for good debate. It always presents both views. This doesn't happen on the other networks to the same degree. And Fox's hard news is straight shooting without political lean that I can detect.. Others may detect right leaning as I can detect left lean at CNN. Not sure..

      I just wish I could get 'hard news' without ANY leaning.
    1. SpiderManAPV's Avatar
      SpiderManAPV -
      The best news I've found, by far, is NPR.
    1. eprisencc's Avatar
      eprisencc -
      Quote Originally Posted by NewdestinyX View Post
      Yes.. CNN isn't a 'bastion' of liberalism I'll grant you that.. But is indeed more left leaning than right in the way it reports.. And yes Fox doesn't have a whole 'left leaning' show, but all its opinion shows bring left leaning guests into their segments for good debate. It always presents both views. This doesn't happen on the other networks to the same degree. And Fox's hard news is straight shooting without political lean that I can detect.. Others may detect right leaning as I can detect left lean at CNN. Not sure..

      I just wish I could get 'hard news' without ANY leaning.
      I would argue that CNN tilts more right than left. MSNBC has not been same since Keith Olbermann left. MSNBC also brings on right leaning guests such as Steve Schmidt and Michael Steele. Furthermore, the left leaning guests that fox brings on are usually weak debaters with the exception of Bill Maher and Jon Stewart. We'll have to pretty much agree to disagree. I get my news from MSNBC and Daily Kos while you likely get yours from Fox News and Red State. I think Obama has been an utter success while you likely think he is a failure. I think George Bush was a pos while you likely dwell on the few good things you think he has done.
    1. eprisencc's Avatar
      eprisencc -
      Quote Originally Posted by SpidermanAPV View Post
      The best news I've found, by far, is NPR.
      Yeah they are good.
    1. NewD's Avatar
      NewD -
      Quote Originally Posted by eprisencc View Post
      I would argue that CNN tilts more right than left. MSNBC has not been same since Keith Olbermann left. MSNBC also brings on right leaning guests such as Steve Schmidt and Michael Steele. Furthermore, the left leaning guests that fox brings on are usually weak debaters with the exception of Bill Maher and Jon Stewart. We'll have to pretty much agree to disagree. I get my news from MSNBC and Daily Kos while you likely get yours from Fox News and Red State. I think Obama has been an utter success while you likely think he is a failure. I think George Bush was a pos while you likely dwell on the few good things you think he has done.
      My concern was that hard news is getting influenced by political thought - when it should not. I challenged your naivete in postulating that FoxNews was the only politically motivated network. They are the ONE right leaning network in all of the media world. Thank GOODNESS there's some semblance of balance in an otherwise sea of progressive drivel that is the rest of the media. I'm not a Hannity or Rush guy at all. I'm a right leaning 'compassionate' conservative. I tend to be more progressive when it comes to taking care of people's basic needs as much as possible without everything turning into a handout. We're raising a generation of wimps with their hands out. My grandfather used to consider a job at McDonald's "an opportunity". These days a 17 year old considers it beneath them and wants $15/hour. So sad.

      I am way conservative on protecting this country and fiscal responsibility.. but I'm very disappointed with the Republican's messaging. It's pretty terrible. I feel like I don't have a home anymore... But so many liberals just look like dolts when they speak. They're mostly rich academics speaking for their side and they don't have a clue about the 'common man's' needs they fight so arduously for. And they allow themselves to get caught up in silly causes that only cost money and line their own pockets..

      Tricky times we're living in.. Hard to find a home politically..

      But -- what was our topic here again??? LOL!!