Sunday, September 30, 2018

Google to pay $9 billion to be iOS default search engine

According to a new report from Business Insider, Google maybe paying Apple $9 billion this year to be the default search engine on iOS. In a note distributed to clients today, Hall says the payments Google is making to Apple could be bigger than anyone thinks. He estimates that Google will pay Apple $9 billion this year and $12 billion in 2019.

From the report:

"We believe this revenue is charged ratably based on the number of searches that users on Apple's platform originate from Siri or within the Safari browser," Hall wrote. "We believe Apple is one of the biggest channels of traffic acquisition for Google."
Last year, Google reported that its traffic acquisition costs (TAC) had increased. In Q2 2017, the company paid out $5.09 billion in TAC fees. Some believe that the increase may have been due to renegotiation with Apple.

Goldman also suggests that TAC fees could account for about 24% of Apple's services business.


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