Google’s Rejection of Microsoft Bing Deal Due to Concerns about Quality and Advertising
In a surprising turn of events, it has come to light that Microsoft attempted to sell its search engine, Bing, to tech giant Apple in 2018. However, the sale was unsuccessful, with Apple citing concerns about Bing’s search quality, advertising unit, and monetization capabilities. This information was revealed in a document that is part of Google’s ongoing antitrust case against the U.S. Justice Department.
Google has seized on this failed sale as evidence that Bing is an inferior search engine, rather than arguing that Google has created an unfair search market for its competitors. According to CNN, Google claims that Apple’s rejection of Bing in favor of Google as the default search engine for its Safari web browser demonstrates that Google is the superior choice. Google also points out that Microsoft approached Apple multiple times over the years with proposals to make Bing the default search engine, but Apple consistently rejected the idea due to concerns about Bing’s performance.
Microsoft, however, denies that the failed sale was due to Bing’s quality issues. The company’s CEO of Advertising and Web Services, Mikhail Parakhin, claims that the sale was blocked by Google. Parakhin alleges that Microsoft offered Apple more than 100% of the revenue or gross profit to make Bing the default search engine but was rejected because of Apple’s existing deal with Google. He suggests that Microsoft was not big enough to win against Google.
The U.S. Justice Department, which is suing Google for alleged unfair tactics in maintaining its position as the top search engine globally, asserts that Google has a financial agreement with Apple to be the default search engine on its products. This agreement costs Google around $10 billion a year, making it one of the search engine’s biggest expenses. The Justice Department claims that if Apple did not receive these massive payments from Google, it would have developed its own search engine. According to estimates from Bernstein analyst Toni Sacconaghi, Google could pay Apple as much as $19 billion this fiscal year.
This ongoing antitrust case has significant implications for Google’s dominance in the search market. If Google can demonstrate that its search engine is superior, it may succeed in the case. However, if it loses, Google could lose its automatic default search engine status on Apple products, posing a potential threat to its market dominance. Currently, Google owns a 90% market share in search, while Bing holds just 3% of the global market share, according to StatCounter.
As the case continues, it remains to be seen how the court will rule and what impact it will have on the search engine landscape. For now, all eyes are on Google as it defends its position against the allegations brought forth by the U.S. Justice Department.
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