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Google Paid Apple $1 Billion to Remain Default Search on iOS

January 22, 2016 - Written By Kishalaya Kundu

Google may be a company with varied business interests, but search continues to earn the company the Lion’s share of its multi-billion dollar revenues. Late last year, the company underwent a massive restructuring, whereby all the non-core businesses that are not earning the company much, were spun off into separate entities under the Alphabet umbrella, of which, Google itself is now a part of. However, Google continues to remain the single most valuable asset within the newly formed entity, as it retains just about all the financially viable products and services on offer from Alphabet, including search, ads (AdSense), YouTube, Google Maps, Google Apps, DeepMind (Artificial Intelligence research), Google ATAP and of course, Android – the world’s largest mobile operating platform that has reportedly earned over $31 billion in revenues and made about $22 billion in profits since 2008, at least according to Oracle anyways.

With search continuing to fuel the Mountain View, CA-based company, being retained as the default search provider on different platforms is of paramount importance, as survey after survey have shown that most mainstream internet users cannot be bothered to change the default search engines on their browsers – whether on desktops or on mobile devices. That being the case, Google apparently shelled out as much as $1 Billion to Apple Inc. in 2014 to remain the default search provider on iOS devices, which include both tablets (iPads) and smartphones (iPhones). While rumors regarding Google’s payments to Apple have swirled around for years, this is the first time that official documents have put a number on the contract that’s been in place between the two tech majors, who, between them, control over 95 percent of the mobile market with their respective platforms.

Details regarding the contract between Google and Apple has now been revealed because of Oracle’s lawsuit against Google, which has brought into public domain some financial information that had thus far only been speculated about, with the aforementioned $31 billion Android revenue figure being another case in point. The report further states that the deal between Google and Apple also includes a revenue-sharing agreement between the two, through which, Apple receives as much as 34 percent of revenues Google earns through default search operations on iOS. Neither company has made any official comment either confirming or denying the report.