Google Paid $1 Billion to Apple to Remain as the iPhone’s Default Search Bar

Yesterday, upon seeing Google’s parent company, Alphabet Inc.’s Quarter 4 numbers, investors speculated that by market opening on Tueday, February 2nd, Alphabet Inc. will officially claim the title as the world’s most valuable company. This news comes after the newly-incorporated Alphabet Inc. reported higher Q4 profits and earnings over the soon-to-be-number-two biggest company, Apple Inc. Alphabet Inc. is expected to blossom this year, as analysts project the conglomerate’s sales to jump 16% this year. In contrast, Apple is coming off its first decline in revenue since 2001, as a mixed perception among analysts grows regarding their outlook for 2016.

This news prompted Apple’s stock to open at 95.41 this morning, which is a full dollar under what it closed at yesterday – 96.43. Therefore, morale may be a tad lower than usual at the Cupertino, CA tech company, seeing as their chief rival has finally overtaken them. But, despite this competitive culture between these two Silicon Valley-juggernauts, their relationship can, at times, be mutually-beneficial. This mostly applies to the nature of their relationship stemming from their collaboration on the browsing features of the iPhone.

Last month, it was disclosed that Google paid Apple $1 billion to keep Google as the iPhone’s default search bar. While the news broke on January 21st, the actual agreement was made back in 2014 – before Google and Apple eventually restructured their deal into a revenue-sharing system. Both companies would have preferred to keep the value of this initial deal confidential, however, an ongoing court battle between Google and Oracle called for the judge to reveal this information. While the judge kept the earnings resulting from the revenue-sharing deal classified, the judge did disclose the split in earnings from the revenue sharing deal – with Apple at 34% and Google at 66%.

With the iPhone 7 arriving this Fall, expect to see Google as the 7’s- and any other models slated for release in the foreseeable future – default search engine. While this shouldn’t come as a surprise to anyone, the revenue-sharing deal provides incentives for both companies to collaborate on further integrations of Google on the iPhone. However, despite this symbiotic relationship, the companies remain fierce rivals, as the Nexus phone is in direct competition with the iPhone.

In regards to SEO, this news solely behaves as just another illustration of the growing vitality of mobile SEO. All sites should be optimized for mobile by this point, as over half of all searches are made on mobile devices. Sites lacking a mobile interface are mostly ineffective and visitors will likely choose another site to visit instead.

As long as the iPhone’s popularity sustains, the direction of mobile browsing will continue to largely hinge on this relationship between Apple and Google.

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