Saturday, December 9, 2023

Revealed the brutal cut that Apple takes from Google’s revenue in Safari

The antitrust trial it faces in the United States is increasingly bothering Google. Especially due to the large amount of confidential information that is being disclosed. Yesterday, for example, it was revealed the brutal cut that Apple takes of the income generated by the search engine through Safari.

The curious thing about the case is that the information should have remained secret, but was exposed by one of the experts who testified in favor of Google. This is Kevin Murphy, a professor at the University of Chicago who testified Monday.

The aforementioned asserted that Apple keeps 36% of the advertising revenue that Google generates through its Safari search engine. As reported Bloomberg During his coverage of the antitrust trial, John Schmidtlein, Google’s lead lawyer, looked visibly uncomfortable when Murphy revealed that fact.

Both those from Mountain View and their neighbors in Cupertino have been reluctant to publicly acknowledge some details linked to the agreement that unites them. At the beginning of October, in fact, it became known that Google pays Apple about $18 billion annually to remain Safari’s default search engine.

However, the new data revealed by Murphy exposes how much that figure represents of the total income that Alphabet generates only through the apple web browser. That Apple takes more than 35 percent of Google’s Safari revenue speaks volumes about a brutal deal for both parties.

Apple takes 36% of Google’s Safari revenue

Photo by Mariia Shalabaieva on Unsplash

It is evident that allowing Apple to take such a large cut is because the business is more than profitable for Google. If the 18 billion dollars that they pay Cupertino to be Safari’s default search engine represents 36% of the income they generate in that browser, we are talking about Mountain View being no less than 50 billion dollars a year only from apple devices (iPhone, iPad, Mac).

As was learned during the antitrust trial against Google in the United States, the current agreement with Apple has been in force since 2016, when the terms that existed since 2002 were renegotiated. Eddy Cueone of Tim Cook’s main supporters, was in charge of dealing directly with Sundar Pichai, CEO of Alphabet, before closing the numbers that are in force today.

Cue himself acknowledged that Apple wanted an even higher percentage of the revenue Google generated on Safari. Although it was never publicly revealed, the executive indicated that after several push and pullit was agreed what the search engine currently pays. This contract is estimated to represent between 14 and 16% of Apple’s annual operating profits..

The antitrust trial against Google in the United States still has several chapters to write. The United States Department of Justice accuses Mountain View of stifling its competitors by offering exclusive agreements to its main business partners. The verdict of the judge in charge of the process is expected to be known sometime in 2024.

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