Apple leverages idea of switching to Bing to pry more money out of Google, Microsoft exec says
Apple was never serious about replacing Google with Microsoft's Bing as the default search engine in Macs and iPhones, but kept the possibility open as a "bargaining chip'' to extract bigger payments from Google, a Microsoft executive testified Wednesday in the biggest U.S. antitrust trial in a quarter century.
“It is no secret that Apple is making more money on Bing existing than Bing does,'' Mikhail Parakhin, Microsoft's chief of advertising and web services, said in U.S. District Court in Washington. The comment drew a laugh from the courtroom. Parakhin was describing Microsoft's years of futility trying to supplant Google on Apple devices.
Analysts estimate Apple collects $15 billion to $20 billion a year in revenue-sharing payments from Google in return for giving its search engine the coveted default slot on Apple's devices. The revenue is generated when users click on advertisements in search results.
The U.S. Department of Justice accuses Google of using similar agreements to lock out rival search engines such as Bing and Yahoo, stifling innovation. The trial began Sept. 12 and is expected to continue into November.
Another witness, the founder of startup Branch Metrics, testified that Google's exclusive contracts with phone companies and equipment manufacturers sabotaged his company's attempts to market a search engine for apps on smartphones.
Alexander Austin said his Palo Alto, California-based company was forced to scale back what its product could do to avoid running afoul of Google's agreements with companies like Samsung and Verizon that make Google's search engine the default choice on digital devices. Branch Metrics had hoped to do for smartphone apps what Google had done for searching the internet -- and to
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