According to a report, Google, the internet giant pays Apple a sum of $1 billion per year to be the default search engine of all of Apple's iOS devices.The finding is a part of a report called "The Next Google is Google" by analyst Scott Devit, who had put Google on his best ideas for investment list last week. The amount is just an estimate but in a way reaffirms analyst firm Macquarie's claim that pegged the figure at $1 billion last year.
In the past, some analysts have estimated that Apple has a revenue sharing deal with Google on iOS search. So that for every one dollar of search advertising collected on an iOS gadget, Apple gets 75 cents.
Devitt thinks Apple wouldn't do a revenue sharing deal with Google because it's too messy. He thinks Apple would do a fee per device because it's easier for accounting and it gives Apple upfront payments. It's also a hedge against users going to Google.com and searching from there instead of the default search box on iOS.
For Apple, $1 billion in pure profit is nice, but it's not much considering the company made $13 billion in profits last quarter.
For Google, it's a pretty good deal. Devitt estimates Google controls 95% of the mobile search market. When you consider that Apple and Android are swallowing the mobile market, paying ~$1 billion a year for a monopoly on the most lucrative online business in the world is a no-brainer.
Here's a table from Devitt breaking down how much he thinks Google pays for total TAC:
Source : Business Insider
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