In a recent piece featured on Bloomberg, journalist Mark Gurman introduced the possibility of Apple developing its very own search engine as a replacement for Google. This fascinating proposition surfaces in the wake of Microsoft’s massive offer to Apple for Bing to become its default search engine.
Google vs Microsoft
Currently, Google finds itself knee-deep in an antitrust trial vs. the US Justice Department, facing allegations of exploiting its influence to maintain a monopoly over the search engine market. While Google has managed to keep much of the evidence under wraps, during a public testimony, Mikhail Parakhin, Microsoft’s Chief of Advertising, made some damning allegations.
Parakhin claimed that “Apple is making more money on Bing existing than Bing does… We are always trying to convince Apple to use our search engine.”
Microsoft alleges that Apple never showed interest in replacing Google with Bing during their most recent meeting in 2021. Instead, Apple used the offer to leverage Google to pay more for the status of the default search engine. Google reportedly shells out between 15 and 20 billion dollars annually for this privilege, thanks to the revenue generated from users clicking on ads within search results.
The Value of Apple
While users technically have the option to switch their default search engine, securing the top spot is highly coveted. Microsoft was not only willing to outbid Google but operate at a significant loss in the initial years to secure the deal. Microsoft later stated that they could only afford to invest massively in improving Bing with the guarantee of it becoming the default browser of a massive platform and reaching a significant number of users. This statement raised some eyebrows, considering Microsoft’s recent massive investments in other projects, including a $13-billion injection into OpenAI, which shows that they are not strapped for cash.
Bing Quality Concerns
Apple’s decision to explore offers for its default search engine seemingly goes beyond financial considerations. Earlier this year, it was reported that Samsung also contemplated replacing Google with Bing, although this deal eventually fell through. The reasons behind this failure remain unclear, whether due to negative user reactions or Google’s successful renegotiation to maintain its prominent position. Nonetheless, it is clear that Microsoft is trying to outbid Google for the top spot in mobile phone search applications. Still, they face a product quality gap exceeding their financial resources.
Apple Becomes a Competitor?
Recently, Google has faced allegations of unethically maintaining a monopoly, with Microsoft pointing fingers at them for stunting Bing’s growth. With the spotlight on the search engine giants, it’s natural to wonder why Apple hasn’t ventured into this space as a competitor. In fact, Apple has been quietly exploring search capabilities for quite some time. These efforts are overseen by John Giannandrea, a former Google executive, who leads a team focused on developing Apple’s next-generation search engine. This search engine is called “Pegasus.” Interestingly, it happens to share its name with NSO Group’s notorious spyware, known for its targeting of mobile operating systems.
Some apps are already using Pegasus, which provides far more accurate search results than any search engine Apple has developed so far. Although Pegasus is not yet a complete search engine that can be compared to Google, it is a solid foundation for creating one.
Gurman argues, Apple, known for internalizing major revenue streams such as chip design, has one crucial piece of the puzzle left: the development of a fully functional search engine. This move would further solidify their control over core technologies.
They do, in fact, possess the necessary capabilities to bring this vision to life. Apple has a dedicated advertising technology team that manages search ad functions, delivers ads to various apps, and handles ad deals. In 2019, Apple also acquired the machine learning-based search engine, Laserlike, which has been instrumental in enhancing Siri’s functionality. With existing custom search engines like Spotlight and Pegasus, Apple already has a foundation upon which to create a search engine. Admittedly, these Apple-built search engines currently pale in comparison to Google.
It is unclear if Apple has the ability or even the desire to develop a search engine that can rival Google, but there is clear revenue potential by taking the search engine in-house. The more information that comes out points toward Apple eventually stepping into the search engine arena.