Considering how big Apple is already ($80 billion per QUARTER!) the idea that they could at some point still decide to add a search engine and the associated revenues is amazing to me. It obviously wouldn't be a 1-to-1 switch with Google traffic coming from Apple devices but if they seriously attempted it I don't see how it wouldn't be a very substantial business very quickly.
Presumably this payment is based on Google's evaluation of the search ad value attributed to Apple devices but only $3.75 billion per quarter still seems low for how much iPhone search traffic there must be? Especially considering the relatively lower level of iPhone ad blocking vs. desktop I see anecdotally in my non-tech friends. I imagine though that both companies send in fairly deadly teams of apex negotiators for a deal like this so it must be close to representing the true economic value of the tie-up...
> if they seriously attempted it I don't see how it wouldn't be a very substantial business very quickly.
I have a hard time parsing your first paragraph. Are you saying Apple could build its own search engine?
Possibly it could. But it's not just about throwing money at it. Do you remember when Google didn't brag about how big a DC footprint they had? It was all hush hush.
Microsoft struggled to bring up a search engine. They even licensed part of it. Some of the queries sent on live.com (as bing was called back then) were actually sent out to third party search providers.
Then Microsoft started bragging about how they're able to operate just like Google, too.
... then Google turned on search-as-you-type, or whatever it was called. The one where you see search results after every keystroke (since removed, because it was kinda pointless). That feature was basically a big FU to Microsoft, saying "we can 10x our search traffic overnight. Can you?".
Google reportedly stopped being secret about its capacity because the secrecy was there to prevent Microsoft truly understanding the scale needed to compete. Once they did understand, Google stopped being so secret.
Apple is years behind. They don't have shovels in the ground. They don't operate services at this scale.
Sure, they are not a small shop. But they outsource so many things in this space.
Microsoft started from a much better position, but they still took years to not be a joke in this space.
But yeah, with Apple building DCs, you should maybe expect them to have a reasonable replacement ready in 5-10 years, if they really put their mind to it.
And then there's the ad side. It's not just the tech (where Google has a 20 year head start), but also the business deals (where again 20 years head start), the inertia of existing advertisers, and integration of search ads and display ads.
But of course, with a closed ecosystem, and actually being the biggest private company in the world, they will absolutely get more monopoly accusations for integrating search, app store, and phone, than Google has.
So no, you can actually throw billions and billions at this problem and still fail. It's not obvious to me that such an investment will have positive ROI for 10 years.
I think the vast majority of people would not know the difference between a Google search and a DuckDuckGo search. They use search to shop the top few retailers or find the actual website of a company, but I doubt many are doing the deep dives that it might actually make a difference to use Google with.
Google’s moat right now is Maps, YouTube, and Drive apps, I think.
Or at least that is my family’s experience. Google search and gmail were easily replaced.
You're focusing on the quality of results, though. That I think is actually the easiest problem, to the point where I didn't even list it.
Remember when Google+ launched, and Microsoft as a joke created a clone in a week or so? That was completely missing the point about what's hard.
Or how "make a twitter clone" is basically the "hello world" of web apps. If it's just you and your friends on it, actually yes you can make a twitter clone that you can basically not tell the difference, and you can do that in a weekend (another weekend to make the app).
To make a twitter clone for 10 people you can run it on your laptop. For 1000 people you buy a VM in some cloud. For a billion apple devices you need world wide pops, fibre deals, plots of land, construction companies, resource planning, legal teams, government contracts, etc...
Again, Apple could possibly do this. But this is not their core skill. And do you know what happens when a company throws billions on not their core skill? Google+ happens.
Are you suggesting DuckDuckGo would not be able to handle Apple switching the default to DuckDuckGo for technical reasons?
I do not know enough about what goes into delivering people search results worldwide. I just know that my family’s experience switching to DuckDuckGo has been seamless, but I also do not know how representative our search behavior is.
> Are you suggesting DuckDuckGo would not be able to handle Apple switching the default to DuckDuckGo for technical reasons?
Right, I think they would not. Not without A LOT of work, on all sides of the business.
If you have a 1qps service, you can scale 100x[1] fairly easily. If you have 1kqps[2] then scaling that to 100kqps is a different beast alltogether. Every single design in load balancing decision, TCP termination, request routing, peering aggreements, geolocation, backend load balancing, and failover, can be assumed to be wrong.
Or if not wrong, then at least untested and many parts will not survive first contact with the enemy.
And that's just to get the SEARCH working at all.
Remember, in order to replace Google's $15B you probably want some sort of revenue, too. And revenue of $15B+cost of service.
So… ads?
Google has buildings and buildings full of people doing nothing but ads. They have presence in pretty much every major city in the world. No, I'm not just talking about the engineering offices that are well known.
To ask Apple to create a search engine is actually to ask them to create "A Google" (except Cloud).
According to the latest earnings report Google spends about $160B and Search ads takes in about $120B. These numbers are not comparable, since they are different level line items. But it should be kept in mind that a very naive reading of this means that yes, Apple has $195B in the bank, but if they tried to "just create a Google" then they'd be broke in just over a year.
Especially since it would be MUCH more expensive and risky to build this in one big shot, than to organically grow it at great profit over many years.
Maybe better to get an earnings report from Google pre-cloud, when it was essentially an ads company by income and investment. Of course it won't be comparable unless Apple decides to also do an ad network. Which they probably would because if you have the tech and the customers, then it's free money.
But you said technical reason. So let's scratch ads, and never mind the money. Yeah, they could be able to do that. It's not clear to me how much of their search index they actually own, though. They say they have a crawler[3], but it sure also reads like "we're just a frontend for Bing". Truth is probably somewhere in between.
So what do you think MSFT would say if Apple started hammering Bing (albeit indirectly) for search results, sans ads? Or even with ads?
So duckduckgo is good because they don't actually have their own index. Bing took years to not be ridiculous (it's good now). We saw Cuil completely fail, even full of ex-googlers.
All this to say: Writing their own search engine is hard (see Bing, and how much MSFT plowed into that to make it work), and DDG can't just be used as a backend. And switching to DDG is just throwing $15B in the lake and giving it to someone else for free.
[1] that's the order of magnitude difference between google and ddg according to
https://www.wired.co.uk/article/duckduckgo-google-alternativ..., of course that doesn't take into account that this would only move apple traffic, but I like the round number.
[2] 1.5B per month is about 578 per second, and with seasonality that it at least 1kqps at peak.
I assumed it would not be difficult to scale. I was asking knorker why they thought it might not scale, as that is what I thought their comment implied.
Admittedly they don't have to vertically integrate, and they wouldn't pay list prices if they use any other cloud.
But honestly, if the idea is to get off of Google search, what exactly is the gain by relying on a third party albeit at a lower level?
You have to ask yourself: Is running a search engine the best thing that Apple could be doing with its time? Is the fact that they don't run their own search engine a danger to their core business?
In the end it comes down to projected cost and income, and obviously I'm not in a position to calculate either one for Apple, not being in the room with their ruthless negotiators.
But yeah, the starting point of dropping google is losing out on these $15B. So already that's what you have to work with. And then the cost of public cloud egress traffic, which is famously ridiculously expensive.
Your comment seems a bit like "why don't they just…", which seems a bit naive when dealing with business at this scale.
I think that Apple would only consider building their own search engine if they had the ability to generate (close to) these $15B per year in value.
Since Apple wants to keep its privacy-friendly brand, these $15B would have to come from something other than ads; and I can't think of another realistic source of revenue. But who knows, the whole "vertical integration" aspect could unlock new scenarios...
I can't find how much revenue Apple is generating from iAd, but all hints point to a fairly small number. I'm guessing that Apple keeps it around to "help" small app developers who build free apps.
And more importantly, iAd seems to focus on advertising apps themselves (like a game ad inside another game). This is a far less intrusive model than a general-purpose search engine (where you find all kinds of advertisers).
Substantial how? Apple doesn’t sell ads and I’m pretty sure that antithetical to their business model, if they did their advantage in other ways (privacy which sucks anyways) would dry up.
Apple build advertisement profiles on iOS users, and allow App Store and Apple News ads to be targeted using said profiles. They are estimated to sell billions of dollars of ads per year. Their tracking is, as far as I can tell, not opt in. Instead it's an opt-out hidden in an obscure settings menu, with the sign "beware of the Leopard" on the door.
So it absolutely isn't antithetical to their business model. The opposite: Apple's business model is to lock users to their platform, and extract rent out of as much of their economic activity as possible. If anything, third party advertisers making money from iOS users directly without giving Apple a cut is what's antithetical to Apple's business model.
It seems basically guaranteed that within a couple of years Apple will be doing another attempt at launching an ad network for third party apps and/or web sites (Safari-only) using the same tracking data.
Monetising mobile search would also require Apple to develop a very strong advertising platform. Doing that would put them in direct conflict with themselves over privacy, either they'd have to compromise privacy to benefit their ad business, or their ad business would be significantly less attractive to advertisers. In practice this would make it very hard for them to monetise search anywhere near as well as Google can, maybe 5 to 1. So if mobile search is worth say $30bn to Google, it might be worth $6bn to Apple.
Combined with the high costs of building both a search engine and an ad platform, and this would result in a massive revenue hit for Apple. I don't see how any vaguely realistic numbers lead to them benefiting from it, at least for quite a long time.
They don’t have to necessarily deeply monetize to be successful, apple could play dumb and offer ad results based on search terms only. DuckDuckGo does similar and I do wonder at scale what kind of revenue this could end up being. Google doesnt behave in an entirely pro-business way as well. Google ads are not market efficient at the moment, with competitors taking keywords that are company names for example, forcing businesses to spend to be the first option even if the user searches your business’ exact name. Eliminating just a few insulting Google search behaviors and limiting data tracking could be a nice revenue stream
I find it interesting that you consider the mob-like behavior of Google forcing everyone to bid on their own name "not efficient". It seems to me like they are really efficient (at their goal of extracting tons of revenue from everyone and their dog).
Presumably this payment is based on Google's evaluation of the search ad value attributed to Apple devices but only $3.75 billion per quarter still seems low for how much iPhone search traffic there must be? Especially considering the relatively lower level of iPhone ad blocking vs. desktop I see anecdotally in my non-tech friends. I imagine though that both companies send in fairly deadly teams of apex negotiators for a deal like this so it must be close to representing the true economic value of the tie-up...