Google to pay Apple $1bn in 2014 for default internet search

ADVERTISING BROKER Google will pay Apple $1bn to be the default internet search provider on iOS devices in 2014, according to Morgan Stanley.

Google pays certain companies to be their default internet search provider, most notably Mozilla with its Firefox web browser. Scott Devitt, an analyst at Morgan Stanley said in a report that Google will pay Apple $1bn next year to remain the default internet search engine on iOS devices, including the iPhone and iPad.

According to Devitt's calculations, 31 percent of Google's traffic acquisition costs will go towards Apple in 2014, however Mozilla will also see the amount it receives from Google grow.

Devitt forecast that Mozilla will pick up $400m in 2014 from Google, a 33 percent increase from this year, while Google will spend a total of about $3.5bn to make its search engine the default in third party software products.

Although Google's expenditure might seem high, the firm not only sees rival internet search vendors shut out of the default search position on most smartphones but it gets valuable data when mobile device users access its search engine, data that Microsoft and Yahoo don't acquire. Apple of course will get $1bn at no cost to it, simply for having popular devices.

Devitt predicted that by the end of this decade Google will pay close to $6.8bn a year for traffic acquisition. µ