Google Pays Apple $1 Billion Per Year for iOS Search Privileges

on February 12 2013 9:36 AM
Google
A digital publisher says Google Inc. unfairly yanked his website from Google News following a crackdown on sponsored content. Courtesy/Google

Despite their complicated relationship, Apple (NASDAQ:AAPL) receives over $1 billion a year from Google (NASDAQ:GOOG), purely as compensation for Google’s position as the default search option on iOS devices. This number comes from analyst Scott Devitt in a recent Morgan Stanley report called “The Next Google is Google.”

This may not seem like much, considering the fact that Apple made $13.1 billion in profit last quarter alone, but it’s a solid $1 billion that Apple receives with zero effort. Google, on the other hand, pulled in $2.89 billion in profit last quarter. The company’s agreement with Apple ensures massive amounts of traffic, at the cost of approximately $250 million per quarter. From 2008-2011, Google also earned about 80 percent of its ad revenue exclusively from iOS devices.

Devitt further estimates Google will pay $300 million to Mozilla to keep its search engine the default for Mozilla’s Firefox browser.

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