Google seemed impregnable. For a quarter of a century, the search engine has dominated a market that has become extremely lucrative for this company: in 2022 alone, the segment was worth $162,000 million.

But the launch of ChatGPT could pose the first real threat to Google’s dominance in this arena. According to The New York Times, Samsung is considering changing the default search engine on its phones and switch from google to bing. The impact of something like this could be remarkable, but the repercussions could be even more significant.

How does Google make money?

There’s a reason Google is known as the search giant. It has been an absolute benchmark in this market since the late 90’s, and its position has only grown stronger over the years, though its competitors have tried to compete with it.

More than half of Google’s revenue in 2022 ($162 billion) will come from search. Source: FourWeekMBA

Right now its market share is 93.17%. Based on StatCounter GlobalStats data. Bing didn’t even hit 3% until at least March 2023, but even with that small share, Microsoft’s ad revenue from this division of business is a staggering $10,000 million, and that’s exactly why the Redmond company is the way it is right now. This. Betting too much on ChatGPT and integrating it into Bing and other products.

In fact, Microsoft expects every 1% stake it steals from Google – if it steals – to represent an additional $2 billion increase in the advertising division’s bottom line.

Advertising, Google’s business model, is present in all of its products, but it’s especially noticeable on the search engine. google.com website by far the most visited According to Forbes, with more than 85,000 million visits in 2022 by Internet users, it is well above 33,000 million YouTube and 17,800 million Facebook, 6,800 Twitter or 6,180 million Instagram.

And on each of these visits, Google delivers more and more ads with promoted results allowing the advertiser to receive a commission. Business runs on PCs and laptops, but it’s especially important on the device where we do almost everything today: mobile.

This is exactly why Google has had agreements with software companies (like Mozilla in charge of Firefox) and hardware companies such as mobile phone manufacturers for years. The company pays these manufacturers a certain amount of money each year to make sure that Google is the default search engine that appears on these devices.

Then the user can use another search engine (Bing, DuckDuckGo, etc.) Be expected and expected for many. This is the de facto standard and seemed to remain so for many more years, but that may change now.

Samsung plans to say goodbye to Google search engine

According to IDC, in 2022 Samsung distributed 261 million mobile phones. In 2021 the figure was slightly higher, 272 million. All are managed by Android and all Google search engine is configured by default. It is one of the best-selling manufacturers in the world and actually according to 2020 data There are close to 1 billion active Samsung devices. A brutality.

Every time a user searches on these phones, they do so through Google, which allows the company to charge small commissions for the ads displayed in the results. And users search for many things every day on our mobile phones. We do it constantly.

With millions of users making several searches a day, it’s easy to understand that this deal is very beneficial for Google, which, according to estimates published in The New York Times, receives about 3,000 million a year from ads displayed on Samsung mobile phones. scanner.

Relationship between Samsung and Google always dotted with pits. The South Korean company has come to promote the development of Tizen for mobile phones as a clear plan B in case things fail on Android. This platform eventually began to be used for other products and, for example, two years ago it merged with Wear OS to power the features of Samsung smartwatches.

In 2017, it is estimated that Google will pay Samsung $3.5 billion to make it the default search engine on its devices. A few months ago, the US Department of Justice stated in Bloomberg that Google “pays Apple, Samsung, and other telecommunications giants billions of dollars each year to illegally maintain their #1 position as a search engine.” Quantities not specified, but

In 2020, the Mountain View company talked to the South Korean company to have Google Assistant promote itself through its own assistant, Bixby, which is used especially for the home, although it continues to provide benefits on mobile phones.

Now the situation looks more delicate than ever, and Samsung’s replacement of Google with Bing is not just economically dangerous for Google: it’s just first of many Manufacturers making the same decision.

In fact, there is a clear protagonist in this scenario. This Apple is the company that has maintained a singular alliance for years with Google, whose iPhone and other products are an absolute reference for millions of users around the world, as well as a rival in almost every way to use the search feature. engine in your products.

The NYTimes article highlighted how Samsung is considering switching from Google to Bing, but Apple has to renegotiate the same deal this year. Will the change be taken into account?

Google and Apple, a strange and very profitable alliance for both

Google pays Apple real big coins every year. There is no official data, but over time data has been leaked that allows sizing of these deals. For example, in 2010, Google is known to pay Apple more than $100 million a year to use the default Google search engine in the company’s products.

In 2014, it was published that it paid Apple $1 billion to keep its browser as the default browser on iOS in the United States, a figure apparently unchanged from the previous year.

In 2021, Forbes estimated that Google would pay Apple $15 billion to remain the default search engine in Safari (both macOS and iOS). That tool said it paid 10,000 million — other sources say 12,000 — in 2020, compared to 3,000 million in 2017. The following year, Goldman Sachs estimated those payments had grown to $9,000 million.

The numbers are dancing and do not always reflect whether these amounts are focused on the United States or globally (as the latest data often does). In 2020, it was revealed that Google paid $1.5 billion to be the default search engine in Safari in the UK alone. What is clear is that this deal hasn’t stopped the growth: In 2022, Google is estimated to have paid Apple $18,000 to $20,000 million to maintain the deal.

Just then, analysts revealed that Apple’s iOS devices contributed “about 50% of income This, of course, shows how important it is for the company to lose such a deal. All these years the deal has of course been very beneficial for both companies, but that may change in the future.

Could Microsoft threaten this position and persuade Apple to replace Google with Bing? As Business Insider pointed out, the truth is Microsoft has 100,000 million cash to spend if you need it, so if anyone can compete with Google on this, it’s Microsoft.

In fact, this has already (somewhat) happened: In 2010, Apple and Microsoft began discussing this possibility, and when Apple announced iOS 7 in 2013, it did so with the surprise that Bing was the default search engine in Siri. The deal will run until 2017.

There doesn’t seem to be any talk about it at the moment, but in January 2023 another even more troubling possibility emerged for Google and Microsoft: Apple abandons and integrates both. your own search engine.

Sources close to the company later said that Apple has been working on the so-called “Apple Search”, a tool that will allow “billions of searches” per day, for some time. For some analysts, this option allows Apple to have a search engine, even if not as advanced as Google’s, which would allow it to not depend on that search engine.

This would be an equally terrible blow to Google’s search and advertising business. one that seemed impregnableand it doesn’t look that much anymore.

Picture: Daniel Romero

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