It’s no secret that Google has a monopoly on the search engine market, but have you ever wondered how it maintains this stranglehold when other equally capable competitors, like Apple, could produce similar products? Well, it’s not as simple as you might think, and it even involves a considerable amount of funds that influence Apple’s decision.
First, let’s just get this fact out of the way: Google maintains about 90 percent of search engine traffic on the Internet, which is an immense amount to consider. It makes sense on Google’s part to do what they can to support what is by far their most profitable product. Through the use of advertisements, Google makes huge amounts of revenue, so it wants to make sure that this income is not affected by the competition.
Now, you might notice that even mobile devices prioritize Google Search as their default search engine. Even an iPhone or any other Apple device will default to Google Search, and of course you can expect Android devices to do so as well. Why do you think that is? The answer might surprise you.
When we say “default search engine,” we mean the search engine used by the browser. So, while Google Chrome and Apple Safari might be the default browser on their respective devices, the search engine they use by default—unless you change the default settings—is Google Search. This is because Google pays billions of dollars to Apple for this privilege. In 2020, the Wall Street Journal estimated that this number was around $8-$12 billion before increasing to $15 billion in 2021, then to potentially $18-$20 billion in 2022.
This is a massive amount of capital, but Google does what it needs to do to maintain its monopoly. On the other hand, the fact that Google must maintain this partnership with Apple means that any disagreements or changes to such an agreement could have considerable impacts on Google’s profits. Apple holds a significant portion of the smartphone and tablet market, so they could very easily create problems for their competitor if they ever decided that the agreement was no longer in their best interest.
On the other side of things, you see Google investing their capital in a smart way to ensure that they can maximize their own profits. No business has to go at things alone, and in this way, they are using their capital in a way that allows them to make the most out of what they are good at. They make a great product, pay Apple to push the great product, and they don’t have to worry about what their competitor is up to; everyone wins, which is what business is all about.
If you’re ready to make the most out of your own assets, Reciprocal Technologies can help you with smart investments in your business technology. To learn more, call us today at (317) 759-3972.