Google is one of the world’s biggest technology companies, but have you ever wondered how exactly it manages to maintain its iron grip on the search engine market? It’s especially curious when you consider that there are other major technology companies out there that might want a piece of the pie, like Apple, yet choose not to. Well, it turns out there is a very good reason for that, and as you might suspect, large amounts of money are involved.
Google maintains an average of about 90 percent of the search engine traffic on the Internet, an overwhelming majority that has enabled the verb “to Google” to become an everyday phrase in our vernacular. Search is Google’s largest and most profitable product, so it makes sense that they would want to invest time, energy, and most important of all, resources, into making it as dominant of a force as possible. Consequently, advertising is where Google brings home the big bucks, and it must do what it can to maintain this monopoly wherever possible.
Users of mobile devices might notice that Google Search is almost always going to be their default search engine. Whether it’s an iPhone or a device running the Android operating system, you are probably using Google Search as your primary default browser, whether you realize it or not. It makes sense that Android devices would run it, but the answer as to why even Apple and its massive install base use Google Search is somewhat fascinating.
Note that we are discussing the search engine rather than the web browser here; whether you are opening Google Chrome or Apple’s Safari on an iPhone, iPad, or MacBook, you’re going to use Google Search for your search engine. The reason for this is that Google actually pays Apple billions of dollars every year 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.
It’s a shockingly huge amount of capital, but it makes sense that Google would want to maintain this relationship with Apple, as any changes to this agreement could impact Google’s bottom line substantially. Apple controls about half of the entire domestic smartphone and tablet market, so they could very easily create problems for Google if they decided to terminate this agreement.
This smart investment by Google is one way that they are using their capital to optimize their own profits, and it also shows that they are willing to form partnerships with other companies in an attempt to remediate their own immediate challenges. Without having to worry about whether users on Apple devices are using Google Search, they can instead invest in building more functionality or better features into their products to make them more marketable and useful. Your business can do the same with its technology management solutions.
DatCom, LLC is happy to work with you to help you focus on what matters most for your business. To learn more, reach out to us at (903) 842-2220.