- Executives from Microsoft and Apple met in 2020 to discuss the potential sales of Bing - Microsoft search engine
- Apple makes over $20 billion from Google annually
- Microsoft believes Apple has only raised the possibility to extract more money from Google to retain its spot
In 2020, executives from tech giants Apple and Microsoft engaged in discussions concerning a potential sale of Microsoft’s search engine, Bing, according to a recent report by Bloomberg. However, these talks failed to progress beyond preliminary exploration, indicating that Apple never seriously pursued the idea.
The context of these discussions is framed by the ongoing antitrust suit against Google by the Federal Trade Commission (FTC). Testimonies in the suit have revealed that Apple did not seriously consider replacing Google as the default search engine on iPhones. Instead, Microsoft believed that Apple merely used the possibility of a switch as leverage to extract more money from Google to maintain its position. Microsoft’s Mikhail Parakhin stated in the US District Court that “It is no secret that Apple is making more money on Bing existing than Bing does.”
Bloomberg’s report further underscores that the lucrative arrangement between Apple and Google was a significant factor in maintaining the status quo. However, Apple reportedly expressed concerns about Bing’s ability to compete with Google in terms of quality and capabilities. Eddy Cue, Apple’s Senior Vice President of Internet Software and Services, testified that there wasn’t a valid alternative to Google at the time when the original deal was struck, and no equivalent has emerged since.
Under the existing arrangement, Apple is believed to generate over $20 billion annually from Google, securing Google’s position as the default search engine on iOS and iPad devices. Although changing the default search engine on an iPhone is relatively straightforward, most consumers seldom deviate from the default settings.
Bing did have opportunities in the past, with Microsoft’s search engine serving as the default for Siri and Spotlight searches for several years, starting with iOS 7. Some speculated that this could lead to a more significant shift, but Apple never fully embraced the change, keeping Google as the default for Safari and delivering the Google search results that users expected. Meetings between Apple CEO Tim Cook and Microsoft CEO Satya Nadella in 2016 explored the potential for a transformative new deal, but it ultimately did not materialize.
Apple and Google renewed their agreement in 2021, and Microsoft’s pitch in the preceding year appears to have been an effort to disrupt these renewal plans. However, the deal between Apple and Google remains in place, maintaining the default status of Google’s search engine on Apple’s devices.