📊 Kevin Murphy, a University of Chicago professor and Google’s main economics expert, revealed that Google pays Apple 36% of Safari’s search advertising revenues to remain its default search engine.
💰 Speculation suggests that this amounts to an $18 billion annual payment although this has not been confirmed.
⚖️ The Department of Justice’s trial is investigating anti-competitive conduct by Google over its search business.
Kate Cox, CMO at BrightBid, emphasized that Google’s dominance in search is partly driven by its distribution deal with Apple which helps maintain its 92% market share in search and secures the widest access to search data to train its algorithm.
Google’s strength in search is also derived from the quality of that algorithm, and the lawsuit adds to the challenges posed by Generative AI and new conversational search formats.
Despite a slight drop in Google’s market share year on year, advertisers are hesitant to diversify spending preferring one Ad Platform to maintain, contributing to Google’s continued revenue dominance in search.
Cox suggests that the $18 billion paid to Apple might be better spent by Google to enhance its product position and improve its search algorithm to address the 5bn unanswered search queries every day (as suggested by Microsoft).