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Once Again: Here's Why Apple is NOT Building a Search Engine

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Once Again: Here's Why Apple is NOT Building a Search Engine

One item that seems to consistently fit under the heading of "Apple rumors that won't die" is the notion that Apple should use its trillions of dollars to take on Google at its own game by building an Apple Search Engine.

Like the idea of Apple buying Disney (or some part of it), speculation that Apple is contemplating a search engine resurfaces every few years, sometimes resulting from discoveries that Apple is toying with web crawlers (which it often is, but not for a full-fledged search engine), to class-action lawsuits that suggest Apple would happily build its own search engine -- but Google is supposedly paying it not to.

Still, as plausible as it seems on the surface, we've always felt Apple getting into the search business was about as likely as releasing "Steve Jobs Heritage Edition" Apple Glasses. This is all presumably based on the idea that a company with Apple's deep pockets and sense of the magical should be able to do anything it puts its collective corporate mind to. However, just because Apple can do something doesn't mean it should, and this week, Eddy Cue, Apple's senior vice president of Services, explained precisely why a search engine makes zero sense for Apple.

This week, Apple filed a motion to intervene in the case between the US Department of Justice and Google during its penalty phase. Apple is siding with Google to argue that its search engine deal with Google isn't anti-competitive and shouldn't be quashed -- a position that isn't surprising since it makes at least $20 billion a year from the arrangement.

In a declaration filed supporting that motion, Cue confirmed that the amount was roughly accurate for 2022 and defended Google's position by pointing out all the reasons why Apple has no desire to play in that sandbox.

First and foremost, building a search engine is hard. The view from the cheap seats makes it look easy, but it's right up there with building augmented reality glasses and self-driving cars. These all require complex technology and engineering -- just fundamentally different kinds.

According to Cue, Apple could build a search engine if it really wanted to, but doing so would "cost billions of dollars and take many years." It would require diverting investment capital and employees from other projects that are far more important to Apple and its investors. Google can do this because search is its primary business; everything else, from Android to its Pixel phones and Nest devices, is secondary to search.

The second point Cue makes is that building a search engine has always been a moving target, and that's even more true today due to artificial intelligence. That makes it not only an expensive proposition for Apple but also a very risky one. Apple could pour billions into building a search engine only to discover that the goalposts had been moved by the time it had something ready, requiring it to invest billions more.

Lastly, Apple has no desire to get into the "targeted advertising" business. That business is anathema to Apple, which focuses on selling its products to its customers rather than selling its customers to advertisers. While many have believed this is exactly why Apple should build a search engine, Cue believes doing one profitably without resorting to targeted advertising is a pipe dream.

A viable search engine would require building a platform to sell targeted advertising, which is not a core business of Apple. Apple does not have the volume of specialized professionals and significant operational infrastructure needed to build and run a successful search advertising business. Although Apple does have some niche advertising, such as on the App Store platform, search advertising is different and outside of Apple'?s core expertise. Building a search advertising business would also need to be balanced against Apple'?s longstanding privacy commitments.

Eddy Cue

Cue believes the DoJ has erred in buying into a myth that Apple would have built its own search engine if its revenue-sharing agreement with Google didn't exist and provides evidence "explaining why that assumption is wrong." Cue flatly says that breaking up Google's search deals won't inspire Apple to create its own search engine, as that's not the business that Apple is in, nor is it a business the company wants to enter. Instead, it would "hamstring Apple's ability to continue delivering products that best serve its users needs."

That's because Apple would be left with "two unacceptable choices," Cue says. It could either let users choose Google as a search engine for Safari without receiving any share of the resulting revenue from those searches, effectively giving Google a massive competitive advantage by providing Apple user data to the search giant at no cost, or it could remove Google Search as a choice on Safari, "harm[ing] both Apple and its customers."

Notably, Cue reveals that Google isn't the only company with which it's struck a search revenue deal. All the alternative search engines available in Safari -- Yahoo!, Microsoft Bing, DuckDuckGo, and Ecosia -- also have revenue-sharing agreements with Apple. It's fair to say the company makes considerably less from these others, since the vast majority of iPhone, iPad, and Mac users are happy to stay with the Google default. Google also likely pays a larger revenue share to remain in that default position, but Cue didn't provide further details.

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