Google should pay $ 15 billion to remain the default search engine on Safari

The race between Google and Microsoft to place their default search engines in Apple’s iOS and macOS continues to intensify.

According to a note from Bernstein analyst Toni Sacconaghi, Google has significantly increased its payment to Apple for placement as the default search engine on Safari in iOS and macOS. The note was first publication by Philip Elmer-DeWitt at Apple 3.0.

Google is not only the default search engine for the Safari browser on both platforms, but also for Spotlight searches on Mac and Siri search results.

Sacconaghi estimates that Google could pay nearly $ 15 billion in 2021 for the default placement. This is an increase from the roughly $ 10 billion Google paid last year for exclusivity. That’s a huge increase from Google’s $ 3 billion Apple paying in 2017 to be the default search engine on Safari.

Sacconaghi has previously said Google will likely pay Apple larger sums to make sure Microsoft doesn’t outbid. The sum, however, is large enough to amount to around 9% of Apple’s gross profits.

Google was the original default search engine for the iPhone when the device was first launched in 2007. However, in 2012, Bing has become the default search engine for iOS and macOS. This return in 2017.

The investment could prove to be worthwhile for Google and its parent company Alphabet. While companies like Waymo and Google Cloud have yet to generate a profit, the company’s advertising business remains strong. In July, Google reported record quarterly revenues and profits, fueled by increased ad spend.

By remaining the default search engine, Google benefits from mobile ad placement on searches and visited websites. But Google faces stiff competition from Microsoft’s Bing, both for placement as the default search engine and in the courtroom.

Sacconaghi noted that regulatory risks, which could force Apple to remove Google as the default search engine, could pose a risk to both companies.