Google pays certain companies to be their default internet search provider, one of the most notable being the Mozilla foundation to be the default search provider in their hugely popular Firefox browser. An analyst at Morgan Stanley called Scott Devitt has said in a report that Google will pay Apple a sum of $1bn in 2014 to remain the default search engine choice on iOS devices such as the iPhone and iPad.
The $1bn is not an insignificant sum, according to Devitt’s calculations 31% of Google’s traffic acquisition costs will be heading to Apple in 2014, the amount Mozilla receives is also set to increase as the overall cost of traffic acquisition creeps ever higher.
Devitt’s forecasts indication that Mozilla should pick up a not so insignificant $400m in 2014 from Google which is around a 33% increase from this year while Google’s total spend will also increase to a total of around $3.5bn. This total is their budget to make their Google search engine the default choice in third party software and products.
Although this level of funding might seem high, Google not only shuts the door on rival search engines such as Bing on important devices but it also gets valuable data when mobile device users access its search engine. Data that competitors Microsoft and Yahoo don’t acquire. Apple on the other hand gets handed $1bn simply from having hugely popular devices.
Devitt has predicted that by the end of this decade Google will almost double its spend on search acquisition to an almost unfathomable $6.8bn.