Time for Apple Search?

Tae Kim of Bloomberg offers an opinion today

[weeks]

For years, the smartphone maker has financially benefited from a lucrative deal in which Alphabet Inc.’s Google paid Apple billions of dollars to be the default search engine option on iOS devices. However, in a world of rising antitrust scrutiny the arrangement isn’t likely to survive. That’s why Apple should proactively get ahead of any risk and make its own offering. The move would help appease regulators, but also be a smart one for its main business.

The numbers in the Google search deal are getting too egregious. Last week, Bernstein raised eyebrows when it updated its latest projections on the accord. The firm estimated Apple will receive $15 billion from Google this year, increasing to as much as $20 billion next year...

See the entire piece here: [bloomberg.com...]

[engine]

This speculation has gone back quite a while.
[webmasterworld.com...]

And the $15 billion deal [webmasterworld.com...]
As i mentioned in that thread, "Google wants to make it difficult to for Apple to leave the Google search service by losing the $15 billion."

[NickMNS]

As i mentioned in that thread,

Yup!
My comments in that thread also still apply, but now 15B instead of 8B.

15 Billion is a lot of money, by any standard. To apple that isn't just 15B in revenue, that is 15B of gross profit. Apple requires zero investment, zero costs, and minimal risk associated with this money. It seems highly unlikely that Apple could gross 15B if it made it's own search engine. Apple creating it's own search engine is a loose loose situation for both Apple and Google.

I wouldn't hold my breath.

[engine]

There's no question, Apple has the financial muscle and deep pockets, but so does Microsoft and Bing is nowhere compared to Google.
The one advantage Apple has is a captive audience.

To some extent, that's exactly what Google has done with Android.

[NickMNS]

There's no question, Apple has the financial muscle and deep pockets,

Yes but how much will they need to invest to be able to generate 15B annual gross profit. 10x GP = 150B, more 250B?
Then Google only makes about 50B annually in gross profit and it has market domination and it is it's core business. If Apple splits the market the most they could strive for 25B, and it is unlikely that this would happen immediately, so hundreds of billions of investment for a fraction of the current return for near to medium term. Deep pockets or not, there is no business case.

I realize now that this is truly a brilliant strategic move on Google's part. Apple takes the money and thus is decentivized from going at it alone, and Bing could never afford to pay that price so is forced into obscurity.

[Lexur]

It opens some doors for Google in Cupertino just in case Apple could think pn privacy, cookies and so on.

[weeks]

NickMNS (and others here) makes the point clearly that Tae Kim only suggests--Google made it so "there is no business case" for Apple (and many others, BTW, using different tactics) to go into the search business against Google. Does that sound legal to you? And, if it's legal to do now, should it continue to be legal?

That's been discussed here a few times as well. (LOL!) But, others (some of who think the internet is like a system of pipes) are starting to notice. And, as some have said here (and everyone seems to assume, including me), Apple COULD do it. Except for that "business case" which was built by Google.

[NickMNS]

Does that sound legal to you?

It is legal, maybe not ethical. It can be framed simply as, Apple is selling an opportunity to provide search engine services, it ask potential providers to bid for that right, the highest bidder is awarded the privilege. This is no different than selling ad space on website, the highest bidder gets the right to show their ad. Google simply out bids all its competitors. There is nothing in a free market economy that makes this illegal.

As to the suggestion that Apple will be the knight in shinning armor, I would say be careful what you wish for. Apple has a very large share of the mobile phone market globally, add to that Search and they may end up with more control of the internet than even Google has now. And despite some marketing mumbo jumbo about privacy, more recently they have begun to let their true intention shine:
[arstechnica.com...]

Note there was a post on WW about link above but for some reason it was deleted.

The root of the problem is not Google per se, it is the fact that a single entity or small group of large entities control the on-ramp to the internet (which ever it maybe Google, FaceBook, Apple, whatever the company! AOL, ABC, AT&T, Dupont, GM...) switching from one to another will not solve the problem. The only solution is to move away from centralization, to a distributed search engine.

[not2easy]

@NickMNS - That post about Apple scanning images was not deleted, but it was not from arstechnica (it was something from a Forbes contributor), that thread is here: [webmasterworld.com...] and has a fresh update on the topic from apple today.

[NickMNS]

It was strange, because it came up in the site search (Google) but the link returned a 404.

Thanks for finding it.

[weeks]

The only solution is to move away from centralization, to a distributed search engine.

I have no idea was a "distributed search engine" would look like. I simply would prefer that the market have several strong competitors. One search engine ruling the internet is good for the status quo. Alas, a lot of people have a lot invested in keeping things as they are.

[Brett_Tabke]

Here was a nice related article:
[fastcompany.com...]

[eek2121]

I would absolutely love it if Apple built a search engine. They could make it privacy oriented while still allowing advertising. Sure, we have DDG and a few others, however, Apple has a lot of money to throw at such a project. They could probably do a better job than even Google if they tried.

[Lexur]

Apple has a lot of money to throw at such a project. They could probably do a better job than even Google if they tried.

Let's say a world class search engine costs five billions.

As Apple receives fifteen billions every year from Google, do you think Apple will make more than twenty billions a year (not income but profit) from clean advertising?

[engine]

@Lexur,
Exactly!
It must have a financial case in addition to the business case for doing it.
From the business point of view, the big strength Apple has is its user base. Google has that same captive audience with Android. I use an Android phone and it's almost impossible to get any other search service integrated in the same way, and "we" know how to change settings, whereas the average user has no clue, and is not really interested. With Apple, they are already on Apple's "system" which is a strong motivator to stay put.

However, the financial case is not proven, imho.

[brotherhood of LAN]

>world class search engine costs five billions

The UK CMA report in 2020 put the figure closer to 20 billion GBP

[martinibuster]

Let's say a world class search engine costs five billions.

The cost of creating a search engine is dramatically lower today than at any other time. In an interview I published, I asked Tim Soulo of Ahrefs if their pockets were deep enough for their new search engine Yep to compete.

He answered that the costs are very low right now and that's one of the reasons they decided it was possible to launch their new search engine, Yep.

DuckDuckGo was reportedly running out of the founder's basement for years with no employees. Then in 2018 it accepted $10 million in funding, increased by an additional $100 million two years later. [Citation] [techcrunch.com]

So it's clear that starting a search engine is not a matter of spending millions. The infrastructure is already out there, there is no reason to spend billions on data centers.

[brotherhood of LAN]

Bit ridiculous referencing a meta search engine (Duckduckgo) as a competitor and Yep who went live a few weeks ago.

DDG have traffic but they're entirely reliant on Bing for results.

Yep doesn't have Google's home page indexed. Sign of the times, them being an SEO tool (that gets blocked more than most) as well as not being a major search engine player. Chicken and egg on the latter one.

[martinibuster]

>>>Bit ridiculous referencing a...

It's in the context of showing that it doesn't take billions of dollars to start a search engine today.

You said it's "ridiculous" but didn't follow up to explain why it's ridiculous within the context of the cost of starting a search engine.

Someone said it costs billions to start a search engine and I pointed out two examples that demonstrate that it does not.

If you have something specific to say other than a general exclamation of "ridiculous" I would certainly welcome it. ;)

[brotherhood of LAN]

The keyword is 'meta'.

[Brett_Tabke]

>Let's say a world class search engine costs five billions.

Think vertical.

My best estimate is that there was $750million pumped into "search engines" in the last two years. Most of that has gone into vertical search engines. I quit counting at about $600million off tech crunch list but know there are a bunch of other ones out there.

While the big beefy 'all web' engines get the press, the quiet vertical engines are tearing it up. Like the engine that indexed 50k restaurants and ranked them by location and patio seating and repackaged those serps to local papers, radio, and tv websites as services. They made and estimated $11mil gross so far off $250k in investment during the pandemic.

That is one of dozens of those stories. Health care engines are exploding behind the scenes. Many of these blur the line between engine and a database, but since they are crawling sites and indexing them, they are engines.

[londrum]

someone needs to do a curated search engine. the web is too big to crawl and you wouldn't want to look at 99% of it anyway. i would forget rankings as well. just show me a page with the fifty best sites on the subject i searched for, like in a grid with screenshots and titles and a snippet, and then let the user go through them.
instead of spending money on crawlers and algos and AI, spend it on just hiring people who sift through the sites

[lucy24]

the web is too big to crawl

Does the Applebot know that?

[brotherhood of LAN]

>you wouldn't want to look at 99% of it anyway.

But you need to crawl it to know it.

Same went for the expired domain game when it had backlink currency. You'd still have to check all the guff to know what was worth anything.

Certainly wouldn't want one entity to decide what is worth something and isn't, bit of a gamble for the (Western) human race if 95% of it is looking to it for answers.